Summary: Mr X complains the Council agreed to sell him some land before withdrawing from the deal. The Council’s original agreement to sell the land to Mr X was against its own Land Disposal Policy. The Council’s actions and poor advice led to Mr X incurring legal fees. The Council has agreed to reimburse Mr X to remedy his injustice.

The complaint

1. Mr X complains the Council agreed to sell him some land and then withdrew from the deal. He says the Council misled him which caused him to incur legal fees. He also says the Council failed to respond to his complaint.

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The Ombudsman’s role and powers

2. We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word ‘fault’ to refer to these. We cannot question whether a council’s decision is right or wrong simply because the complainant disagrees with it. We must consider whether there was fault in the way the decision was reached. (Local Government Act 1974, section 34(3), as amended)
3. If we are satisfied with a council’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)

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How I considered this complaint

4. I have considered Mr X’s complaint and supporting information.
5. I have also considered the Council’s response to Mr X’s complaint and to my enquiries.
6. I have written to Mr X and the Council with my draft decision and considered their comments.

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What I found

The Law

7. The Local Government Act 1972: General Disposal Consent (England) 2003 places a statutory duty on Councils to not dispose of land and property at less than the best price (‘best consideration’).

Council’s Property Disposal Policy 2019.

8. The Council’s Property Disposal policy should comply with the requirements of the Act. The policy sets out the disposal procedures. This includes establishing the planning potential for changes of use/development before the disposal.
9. The policy also sets out the consultation procedures. It says the Council will advise tenants of its intention to sell property they occupy once it has made a decision to proceed with the sale.
10. As well as the statutory duty imposed on the Council by the Act, there is a general expectation the Council act fairly when disposing of land. The policy sets out the general principles for the methods of sale which generally includes open market advertising. The policy also includes ‘exceptions to the General Principles’. This is relevant in Mr X’s case.
11. The policy recognises in some cases, open marketing advertising may not achieve best consideration. It refers to ‘special purchasers’ for whom the land has a higher value than for anyone else. In these circumstances, the Council decides to negotiate directly with the special purchaser without open market advertising taking place.
12. The policy sets out the issues the Council must consider when making direct negotiations with a potential special purchaser. The Council must then use standard criteria when assessing the proposal.
13. The Council sometimes receives requests from the public and existing tenants of council-owned land to purchase land. In these cases, the policy says the Council must decide whether its in the interests of the Council to dispose of the land.

Notice to Quit

14. A “notice to quit” is a notice given to a tenant to surrender and vacate the rental property by a certain date. A landlord uses a notice to quit when they want to recover possession of property.

Planning

15. A person usually needs planning permission when they change the use of land or a building. A council needs to analyse material planning considerations when considering a planning application. One of the key considerations is the policies in the council’s development plan. The development plan will designate the green belt for the area.
16. The Planning and Compensation Act 1991 introduced rolling time limits within which councils can take planning enforcement action against breaches of planning control. After the time limit, the use becomes lawful.
17. If a person wants to be certain the existing use of land is lawful for planning purposes, they can apply for a certificate of lawfulness.

What happened

Background

18. The area of land subject to this complaint lies on the edge a village, in the designated green belt. The wider site is approximately 0.13 hectare. The piece of land leased by Mr X, and referred to as ‘edged in red’ is approximately 10% of the site.
19. The Council says the wider site is now largely vacant with a few stand-alone detached garages, subject to two individual garage tenancies, and Mr X’s licence agreement.
20. In October 2009, Mr X began to lease a piece of land from the Council. The Council granted a licence for Mr X to park six minibuses. In a letter dated 8 October 2009, the Council advised Mr X the planning department had given permission to park his minibuses. It said this was on the strict understanding that he adhered completely to the terms and conditions contained within the licence.
21. The licence specified that Mr X could only use that part of the land edged in red. This was for the purposes of parking six minibuses only and for no other purpose whatsoever. I have seen a copy of the licence with the accompanying plan. The licence included conditions regarding the use of the land, payment of rates, and the maintenance and security of the site.

Disposal of the site

22. In 2016, the Council received various requests, including one from Mr X, to purchase the wider site. Mr X wanted to purchase the entire site with vacant possession, to park minibuses. The Council said some people viewed Mr X’s bus fleet as a problem in the village due to him parking some of the buses on the street.
23. The Council have said, despite there being other interest in buying the site, the Council judged Mr X as a special purchaser having an interest in the land. This was because he held a licence for part of the site, and his purchase of the site would remedy the nuisance of him parking his buses on the street.
24. The Council signed off the sale agreement in July 2016. It accepted Mr X’s offer of £25,000 and both parties instructed their lawyers.
25. The Council has acknowledged it significantly delayed the legal process in relation to the disposal of the land.

Suspension of the disposal

26. In January 2018, the Council received a complaint about Mr X from another tenant on the wider site.
27. The Council said, at this stage, it had not sent a formal notice to quit to the other tenants. The Council confirmed that draft contracts had been agreed with Mr X but had not been signed by the Council. Therefore, it decided to put on hold the proposed disposal to Mr X while it reviewed the file and investigated the complaint.
28. There is no correspondence between the Council and Mr X regarding the complaint or subsequent suspension. The Council said it was in regular verbal contact with Mr X about the situation.
29. The Council said the complaint against Mr X was never proven. However, it did say the complaint acted as a break for the Council to review the proposed disposal agreement. It has said this review, revealed some key issues with:
• Planning permission for the land leased by Mr X and wider site;
• Breach of the Council’s Disposal Policy; and
• Longstanding tenants.

Planning

30. The Council advised Mr X in 2009 the planning department had given permission to park minibuses on the strict understanding that he adhered to the terms and conditions contained in the licence. However, it could not find any planning consents on file. The Council confirmed planning permission would be required for a change of use.
31. It recognised Mr X has parked minibuses on part of the site for a ten year period. Therefore the Council would be likely to grant a certificate of lawfulness for that part of the site subject to Mr X’s existing licence.
32. The Council has advised that it would resist an intensification of use in the wider site. It said the land is green belt, and the proposed use would be inappropriate development. It said it would impact on the openness of the green belt and the character of the landscape.
33. In the knowledge that planning permission is required for the proposed use, the Council considered it inappropriate to continue with the sale without inserting a condition to sell subject to obtaining the appropriate planning consent.
34. In addition, the Council said it could not be seen to sell land for a use that required planning consent in the knowledge that it would be highly unlikely to grant consent.

Breach of the Council’s Disposal Policy

35. The Council said under the Council’s current Disposal Policy, Mr X is not a ‘special purchaser’ and certainly not to the exclusion of the other two tenants. The Council did not provide the other tenants with an opportunity to submit a bid to purchase the site at the time.
36. It confirmed the owners of the adjacent garden centre had approached the Council. The Council said it would regard them as special purchasers given that they wanted to acquire the site for expansion purposes. The Council did not give them the opportunity to bid for the site. This was in contravention of the Council’s Disposal Policy.
37. The Council acknowledged this was as a major error that it should have considered at the time of the agreement.

Longstanding tenants

38. The Council established that to in order to gain vacant possession for Mr X, the Council would have to serve the other two garage tenants 3 months’ Notice to Quit.
39. The Council said they had been tenants for 17 years and there was a sensitivity around serving Notice to Quit on such long term tenants.

Council decision to withdraw from the agreement

40. The Council said once it reviewed the case in January 2018, it recognised its agreement to sell the land to Mr X was fundamentally flawed. It said it had not followed its own Disposal Policy and was in danger of breaching planning on a sensitive site.
41. The Council said it considered the following options:
1. To continue with the existing agreement and sell the land to Mr X and serve 3 months’ notice to quit to the other tenants. The sale has been on-going for at least 3 years and been an issue in the village for some 10 years. This was considered inappropriate for reasons stated. Namely breach of the Disposal Policy and planning.
2. To grant Mr X a lease across the site at an annual rental for a shorter term of 10-15 years excluding the existing garage tenants, subject to him obtaining a relevant planning consent. This was dismissed as the chances of obtaining planning were so low.
3. To renew the existing licence agreement to maintain Mr X’s business and advise him to apply for a “Certificate of Lawfulness”.
42. The Council chose option 3.
43. It said it acknowledged the Council would be criticised for withdrawing from the agreement. However, the Council considered the breaches of the disposal policy and the issues relating to planning were of greater significance. It concluded the reality was the wider site could never be used for the purpose it was being sold for.

Mr X’s complaint

44. In October 2018, Mr X complained to the Council. He said the Council had originally agreed to sell him the land and then backed out, leaving him with a large legal bill. The Council acknowledged his complaint but did not issue a formal response.
45. Mr X complained again in December 2018, stating it was his second letter. Again, the Council acknowledged Mr X’s complaint but did not respond.
46. In June 2019, after Mr X had complained to the Local Government and Social Care Ombudsman, we wrote to the Council. The Council acknowledged it had failed to respond to Mr X’s complaint. It said this was due to several factors including long term sickness of a key manager.
47. The Council provided Mr X with a response to his complaint in June 2019, nine months after he’d first complained.

The Council’s response

48. The Council apologised to Mr X for the delay in responding to him. It said the Council had received a letter of complaint from one of the other tenants and it decided to postpone the sale whilst it carried out a review.
49. The Council summarised the key issues it had considered when reviewing the decision behind the proposal to sell the land to Mr X. This were the same issues discussed in paragraphs 29-39 above.
50. It concluded by saying the Council could not support a disposal to Mr X of the entire site. However, it was happy for Mr X to continue to occupy a part of the site either by way of a licence or lease.

My Findings

Disposal of Land

51. The Council has admitted that decisions made by the Council in 2016 to enter into an agreement with Mr X to dispose of the land, were flawed. It said the Council had not followed its own Disposal Policy and was in danger of breaching planning on a sensitive site.
52. The Council was at fault for agreeing to dispose of land before considering its disposal and planning policy.
53. The Council said it signed off the sale agreement in July 2016 and instructed its lawyers. Mr X instructed his lawyers at the same time. I have seen evidence that Mr X paid £286 in legal fees over the period from July 2016 until present in relation to the purchase of the site. Mr X would not have incurred these fees if it weren’t for the fault of the Council.

Planning

54. When Mr X first started to lease the land from the Council, the Council gave him incorrect information that the site had planning permission. This was fault. This did not cause an injustice to Mr X in the short term, as he was able to operate his business for eight years without the issue of planning arising. Only when the Council reviewed the disposal agreement in early 2018, did it discover the site did not have planning permission. This information was key to the Council deciding to withdraw from the disposal agreement.
55. The Council said as Mr X has operated his business on the land for a long period of time, it would be likely to grant a certificate of lawfulness for the use of parking minibuses.
56. The Council charges the same fee for a lawful development certificate application as for an equivalent planning application. The change of use application fee is £462.
57. Although Mr X does not have to obtain a certificate of lawfulness, it would provide certainty for him. Mr X would not have needed to apply for this if the Council’s information had been correct in the first place. Therefore, I consider the Council should waiver the fee, as a remedy for the time and trouble experienced by Mr X in relation to this complaint.

Council complaints

58. The Council failed to respond to Mr X’s complaint on two separate occasions. This is fault. This meant Mr X waited nine months for a response. The Council only responded once Mr X complained to the Local Government and Social Care Ombudsman.
59. The Council said the failure to consider Mr X’s complaint was due to an administrative error which was intensified by the long term sickness of a key manager.
60. The Council’s failure to consider Mr X’s complaint incurred avoidable time and trouble for Mr X.
61. If the Council waivers the fee of £462 for a certificate of lawfulness application, I would consider this a satisfactory remedy.

Agreed action

62. Within 4 weeks of my final decision, the Council has agreed to:
1. apologise to Mr X for causing him uncertainty and frustration by agreeing to sell land to him before checking all its policies;
2. reimburse Mr X £286 for the legal fees he unnecessarily incurred as a result of the Council’s actions;
3. waiver the £462 fee for a certificate of lawfulness application;
63. Within 12 weeks of my final decision, the Council has agreed to:

d) review its procedures for allocating complaints to officers to ensure complaints are not overlooked when staff members are absent.

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Final decision

64. I uphold Mr X’s complaint. The Council was at fault for agreeing to dispose of land before considering its disposal policy and the land’s planning status. This fault led to Mr X incurring legal costs and uncertainty.

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Investigator's decision on behalf of the Ombudsman