Summary: Mr X complained the Council failed to properly consider his request to release restrictive covenants on his property. We find the Council at fault for failing to have a process in place for dealing with these requests. We also find the Council at fault for delays in responding to Mr X, for delays in reaching a final decision, and for failing to provide clear explanations. The Council has agreed to apologise to Mr X, make a payment to recognise the injustice caused, and act to prevent recurrence.

The complaint

1. Mr X complains about how the Council dealt with his request to release restrictive covenants on his property. As a result, Mr X has said he incurred the costs of employing a solicitor and had to delay his plans to build a new dwelling on his land.

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The Ombudsman’s role and powers

2. We investigate complaints about ‘maladministration’ and ‘service failure’. In this statement, I have used the word fault to refer to these. We must also consider whether any fault has had an adverse impact on the person making the complaint. I refer to this as ‘injustice’. If there has been fault which has caused significant injustice, or that could cause injustice to others in the future we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), as amended)
3. We consider whether there was fault in the way an organisation made its decision. If there was no fault in how the organisation made its decision, we cannot question the outcome. (Local Government Act 1974, section 34(3), as amended)
4. If we are satisfied with an organisation’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

5. I spoke to Mr X about his complaint and considered information he provided. I also considered information received from the Council.
6. Mr X and the Council had an opportunity to comment on my draft decision. I considered any comments received before making a final decision.

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What I found

Relevant law and policy

7. Where a property was purchased under the Right to Buy scheme (RTB) or previously owned by the Council, there may be legal restrictions on what the new owner can do with it.
8. Restrictive covenants are legally binding but can be modified or removed if the Council agrees to this.
9. The Council’s website says it will assess all requests of this nature by looking at their specific facts and merits, including any relevant legislation and caselaw.
10. The modification or removal of a covenant may increase the value of a property. Where the Council feels this is the case, its website says it may undertake a valuation to determine the appropriate level of damages or compensation due as a result.
11. Where it agrees to modify or remove a covenant, the Council charges an administration fee and reasonable legal costs to the applicant.

What happened

12. Mr X’s property was previously owned by the Council and was subject to restrictive covenants which limited what he could do with it, including building a new dwelling. The Council approved a planning application for Mr X to build a new dwelling on his land, but he could not begin work while the restrictive covenants remained in place.
13. Mr X applied to the Council for the covenants to be modified or removed so he could act on his planning permission. The Council considered Mr X’s request and told him it would remove the covenant if he paid it £12,500. To reach this figure, the Council considered the uplift in value to Mr X’s property once the development was completed compared to what it had originally received for the property.
14. Mr X complained to the Council saying it did not follow a proper process in reaching the figure of £12,500. He asked the Council to reconsider its position and remove the covenant to allow him to build the new dwelling.
15. The Council responded to Mr X’s complaint and explained the development Mr X proposed could be grounds for lifting covenants provided it does not have a detrimental effect on neighbours or the surrounding community. In these circumstances, the Council said it would seek to recoup administrative and legal costs and may, at its discretion, seek compensation/damages. The Council said it felt the proposed dwelling would negatively impact its remaining land because of changes to the surrounding environment and increased pressure on managing the estate. The Council said it had now decided not to lift the covenants. The Council said it was under no obligation to lift the covenants and so it did not uphold Mr X’s complaint.
16. Mr X asked the Council to reconsider its stance. He questioned how changes to the surrounding environment by the proposed new development would have a negative impact on the Council’s remaining land and put pressure on managing the estate.
17. The Council responded further to Mr X’s complaint two months later. It said it had reviewed its initial response and repeated the reasons and findings given but did not expand upon them. The Council said its decision had not changed but apologised for the delay in responding to Mr X and offered him £50 as a gesture of goodwill.
18. Mr X then spoke to a solicitor, and they wrote to the Council contesting its reasoning. The solicitor said the Council could not unreasonably delay giving consent and referred to relevant caselaw to support their position that the Council had no practical benefit over the land and no adjoining land that would suffer. The solicitor argued there were no grounds on which to refuse to lift the covenants on Mr X’s land. They explained if the Council insisted on enforcing the covenants, Mr X may appeal to the Upper Tribunal to have them lifted.
19. The Council’s legal team then considered the matter to advise on the next steps.
20. As they had not received a response, Mr X’s solicitor chased the Council the following month.
21. The Council then responded to confirm it had amended covenants in similar situations and would be prepared to do so for Mr X. The Council said it would agree to release the covenants on Mr X’s property if he covered its legal and surveyor’s fees of £1,500.
22. Mr X’s solicitor wrote to the Council to explain he agreed to pay the legal fees but felt the surveyor’s report was the Council’s responsibility. They reiterated that the Council had never given a proper reason for refusing to modify the covenants on Mr X’s property. They said if the Council could not reach an agreement with them, they would prepare a case to be filed with the Upper Tribunal.
23. The Council sought further legal advice, which it received two months later.
24. Following this advice, the Council agreed to remove the restrictive covenants and wrote to Mr X’s solicitor with an agreement to do this subject to fees of £1,500. This was agreed and completed around 15 months after Mr X’s initial request to the Council.

Analysis

25. The Ombudsman is not an appeal body, and it is up to the Council’s discretion to decide whether or not to remove restrictive covenants. This means our role is not to consider whether an application should have been approved or not. Rather, we consider whether the Council decided on an application properly, having regard for the key factors and policies which are relevant.
26. After considering all the available evidence and arguments, the Council agreed to remove the covenants provided Mr X covered its legal fees. The Council was entitled to pass on the cost of the legal fees to Mr X and I do not find it at fault here.
27. The Council’s policy explains it will deal with each request on its own merits and facts. However, the Council does not have any process or guidance in place to follow when making these decisions. This is fault and caused uncertainty for Mr X which is injustice. It also meant it took around 15 months to make a decision on removing the covenants, and the delay caused Mr X further uncertainty and injustice.
28. I say this because the Council’s decision-making did not follow any logical path. It initially agreed to remove the covenants if Mr X made a payment representative of the uplift in value to his property, then decided it would not remove the covenants at all, before eventually agreeing to remove them if Mr X covered its legal costs. If the Council had a process in place to guide its decision-making, I find it likely it would have made a final decision on whether to remove the covenants much sooner than it did.
29. When Mr X challenged the Council’s valuation, it revoked its decision to remove the covenants with no real explanation as to why it had made this decision. The Council said it now felt the proposed dwelling would negatively impact its remaining land and increase pressure on managing the estate, but it did not explain what it meant by this. When Mr X asked the Council to explain its reasoning in more detail, the Council repeated what it had already said without expanding on its reasoning. I find this is fault and caused uncertainty for Mr X, which is injustice.
30. The Council was also responsible for delays throughout the process. There are multiple occasions where Mr X or his solicitor had to chase the Council and waited months for replies. This is fault and added to Mr X’s uncertainty and distress, which is further injustice.
31. Mr X has said he feels the Council ought to reimburse his solicitor fees. However, we do not normally ask a council to pay solicitor or professional fees where a complainant could have brought a case to our service before incurring the fees. As Mr X could have raised his complaint with our service before engaging a solicitor, I have not asked the Council to include this as part of a remedy to the injustice caused to him.

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Agreed action

32. To remedy the injustice caused by the faults identified above, the Council has agreed to:
33. Within one month of the date of this decision:
• Apologise to Mr X for the injustice caused by the identified faults; and
• Pay Mr X £500 to recognise the distress and uncertainty caused by the delays in reaching a final decision, the delays in responding to him, and the lack of clear information during the process.
34. Within three months of the date of this decision:
• Create a process to aid the decision-making of future requests of this nature.
35. The Council should provide us with evidence it has complied with the above actions.

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Final decision

36. I find the Council at fault for failing to have a process in place for dealing with requests like this. I also find the Council at fault for delays in responding to Mr X, for delays in reaching a final decision on his application, and for failing to provide clear explanations. The Council has accepted my recommendations and I have completed my investigation.

Investigator’s decision on behalf of the Ombudsman

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Investigator's decision on behalf of the Ombudsman