Two homeowners faced a struggle to sell their homes after South Oxfordshire District Council failed to give them full information about a restriction on their properties, the Local Government Ombudsman (LGO) has found.

The homeowners both lived out of the area when they bought their ex-local authority homes some years ago. They were aware of a restriction on the properties at the time but the council did not inform the complainants’ legal representatives of the full extent of that restriction. The homes should only have been sold to people living in a specific area. The council also did not check if the homeowners were entitled to buy the properties.

By the time the homeowners decided to sell in 2014, the council had revised its policy and was enforcing the local restriction. One of the homeowners lost a sale, while the other’s sale was more difficult. The sales prices of both houses were affected because of the restriction.

Section 157 of the Housing Act allows councils to impose a restriction on the future sales of homes bought under the ‘Right to Buy’ scheme if the property is in a national park, area of outstanding natural beauty or designated rural area. This also means that the property cannot be sold without the consent of the local council; and the person intending to buy the home must have lived or worked in the specified area for three years. Councils do, however, have the discretion to agree to the sale of the property if the potential purchaser does not have a local connection.

The pair complained separately to the LGO that the council failed to inform them fully of the restrictions when they bought their properties and also did not tell them when the policy was clarified in 2013, reintroducing the local restrictions.

Both homeowners complained that they would not have bought their properties had they known the council would only grant consent to a person with a local connection as this limited the future market for their properties. Neither of the homeowners were the first purchasers of the properties.

The council argued that the onus was on the homeowners’ solicitors to check the full details and inform them of the restrictions and added that it exercised its discretion not to enforce the full terms of the restriction until 2013.

The LGO found South Oxfordshire council at fault for failing to check either homeowner had a local connection before granting consent to buy, and found no evidence that the council actively made a decision to exercise discretion not to enforce the local connection requirement.

The LGO said the council should have informed the women of the restriction. The investigation also found the council at fault for failing to give the solicitors complete information about the section 157 restrictions.

Local Government Ombudsman, Dr Jane Martin, said:

“Selling a home is a stressful time for most people, but in these two instances South Oxfordshire Council made the moving process all the more difficult because of the historic restrictions they were now enforcing on the properties.

“I have found no evidence that the council made an active decision not to enforce the restrictions when the homeowners bought their properties, and officers should have properly informed the sellers and buyers’ legal representatives when they made enquiries.

“I now urge the council to consider my report and provide the remedy I have recommended.”

To remedy the injustice, the council should instruct the district valuer to assess the value of the properties at the point at which both homeowners sold them with the partial restriction imposed when they bought them. The district valuer should complete a similar assessment of the value of the properties complete with the full section 157 restrictions imposed.

If the properties’ values were affected, the council should pay fifty per cent of the difference to both homeowners. The council should only pay half the amount because the LGO cannot hold the council fully responsible for any advice given to the homeowners about the restrictions when they bought their properties.

The council should also pay £250 each to acknowledge the significant stress caused to them.

Article date: 03 September 2015