South Oxfordshire District Council has been asked to reconsider its response to a Local Government Ombudsman (LGO) report about the historic sale of two council houses.

The LGO has issued a further report after the council did not implement one of the initial report’s recommendations.

In the original report, issued in September 2015, the council was found at fault after two homeowners complained to the LGO about the way the council handled the sale of their homes.

The homeowners both lived out of the area when they bought their ex-local authority homes some years ago. They were aware that there was a so-called Section 157 restriction on the properties but the council did not inform the solicitors of the full extent of that restriction, which was that 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 this local restriction. Because of this, one of the homeowners lost a sale, while the other’s sale was made more difficult. The sales prices of both houses were affected.

The pair complained separately to the LGO. The Ombudsman 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 homeowners of the full restriction. The investigation also found the council at fault for failing to give their solicitors complete information about the restrictions.

One of the initial recommendations was to instruct the district valuer to assess the value of the properties at the point at which both homeowners sold them with the same partial restriction imposed as when they bought them and compare it with the value of the properties when they were sold with the full restriction. The district valuer has completed an assessment of the properties’ values but was instructed to do so with a less stringent interpretation of the section 157 restriction than the council imposed on the homeowners when the properties were sold.

Additionally, the council was also recommended to pay fifty per cent of the difference to both homeowners, if the values were affected and it has not agreed to do this. Neither has the council provided the Ombudsman with a copy of the valuation for one of the homeowner’s houses.

The council has reiterated its argument that the onus was on the homeowners’ solicitors to check the full details and inform them of the restrictions when they purchased the properties.

Local Government Ombudsman, Dr Jane Martin, said:

“While I welcome the improvements the council has made to its policies and procedures following my initial report, I am disappointed it has not implemented my recommendations in full.

“The council has a responsibility to provide full and accurate information in response to solicitors’ enquiries. Its failure to do so contributed to the potential financial losses suffered by the two homeowners.

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

If the LGO identifies fault by a council that led to the complainant suffering an injustice, it makes recommendations to put things right. If recommendations are not implemented the LGO will publish a public report. In the rare circumstances the injustice is not remedied by a public report, it will publish a further report. LGO recommendations are not legally binding, but it achieves compliance in over 99% of cases.

Article date: 08 July 2016