Summary: Mrs X complains the Council failed to deal properly with the valuation of her late father’s beneficial interest in the property he had lived in with his wife. When Mrs X questioned the Council’s valuation, it failed to get an independent valuation. That leaves doubt over the true value of the father’s interest in the property when his wife died. The Council needs to remedy that by getting an independent valuation.

The complaint

1. The complainant, whom I shall refer to as Mrs X, complains the Council failed to deal properly with the valuation of her late father’s beneficial interest in the property he had lived in with his wife.

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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 an injustice, we may suggest a remedy. (Local Government Act 1974, sections 26(1) and 26A(1), 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, sections 30(1B) and 34H(i), as amended)

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How I considered this complaint

4. I have:
• considered the complaint and the documents provided by Mrs X;
• discussed the complaint with Mrs X;
• considered the comments and documents the Council has provided;
• considered the Ombudsman’s guidance on remedies; and
• invited comments on a draft of this statement from Mrs X and the Council, for me to consider before making my final decision.

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What I found

What happened

5. When Mrs X’s father, Mr Y, went to live in a care home, his wife remained in the family home.
6. Mrs Y died on 9 June 2022, leaving her share of the property to her grandchildren. Mrs X says the property was valued at £350,000 after her mother died. The family’s plan was to let the property after carrying out the work needed to make this possible.
7. After learning that Mrs Y had died, the Council wrote to Mrs X on 10 August. It said:
• Mr Y was entitled to a 12-week property disregard from the date of his wife’s death;
• after that it would include the capital value of Mr Y’s interest in the property in his financial assessment, which would take his capital over £23,250, so he would have to pay the full cost of his care (£5,030.76 every four weeks) from 1 September; and
• it could offer Mr Y a deferred payment agreement (so his interest in the property did not have to be sold until after his death).
8. The Council wrote to Mrs X on 26 August, reminding her the 12-week property disregard would end on 31 August.
9. The Council asked one of its surveyors to value Mr Y’s interest in the property.
10. The Council wrote to Mrs X on 6 October saying it had valued Mr Y’s beneficial interest in the property at £187,500. It said he therefore had to pay the full cost of his care from 1 September 2022. It sent Mrs X a copy of its valuation report which said:
• Mr & Mrs Y’s property comprised a lounge, a dining room, a kitchen, a downstairs bathroom and WC, two double bedrooms up steep and narrow stairs, a narrow front garden and a larger rear grassed garden;
• the property was being refurbished, with walls and floors having been stripped;
• the property did not meet the minimum energy efficiency standards, but it was assumed the work being carried out would improve this rating, otherwise it would be unlawful to let the property;
• “In arriving at our valuation, we have considered the associated impacts on marketability and value but we have not costed the likely works required to bring the property into compliance; however, we have taken a view as to the likely market view in relation to the need to carry out work. Therefore, it is advisable that an expert’s opinion is obtained to investigate costs and that the valuation is reviewed in the light of the opinion received”;
• a comparable property (three-bedroom barn conversion in two acres) had sold for £520,000 in 2021;
• the market value of Mr & Mrs Y’s property was £500,000. “Allowing 10% for sale costs and delay in persuading co-owner(s) to co-operate in a sale and incentivising a purchaser the valuation for the Care Act 2014 of a 50% interest is therefore £187,500”;
• there was nothing to prevent a buyer of Mr Y’s interest in the property from forcing the sale of the property;
• “a market for the applicant’s beneficial interest would be found amongst the private clients of an investment consultant, firm of solicitors, firm of accountants etc. or failing that, the interest could be disposed of at a specialist auction house”.
11. Mrs X appealed the Council’s decision. She told the Council her father’s interest in the property needed adjusting to reflect the cost of the work the family were arranging to make it habitable. She estimated this to be around £30,000.
12. When the Council replied to the appeal on 9 November, it said:
• Mrs X had not provided any detail or costing of the work being carried out to the property. Without more information it could not say whether any costs incurred affected the valuation;
• it remained the Council’s view that £187,500 was the correct valuation of his interest in the property, as it included a discount of £37,500 to make it attractive to a willing buyer; and
• Mr Y owed £13,441.64 up to 30 November, which would increase by £1,086.64 a week, if Mr Y did not pay the full cost of his care.
13. Mr Y died on 31 December. The Council says Mr Y owes £17,6423. The NHS is considering an application for NHS Continuing Healthcare which, if successful, will have implications for any money owed to the Council.
14. Having taken legal advice and consulted a national charity, Mrs X questions whether her father’s interest in the property has any value at all.

Is there evidence of fault by the Council which caused injustice?

15. Annex B of the Care and Support Statutory Guidance says:
• if both parties agree a person’s capital is more than the upper capital limit of £23,250, it is not necessary to get a precise valuation. If there are any disputes, a precise valuation should be obtained;
• “Where a precise valuation is required, a professional valuer should be asked to provide a current market valuation. Once the asset is sold, the capital value to be taken into account is the actual amount realised from the sale, minus any actual expenses of the sale”;
• “Where the value of a property is disputed, the aim should be to resolve this as quickly as possible. Local authorities should try to obtain an independent valuation of the person’s beneficial share of the property within the 12-week disregard period where a person is in a care home. This will enable local authorities to work out what charges a person should pay and enable the person, or their representative, to consider whether to seek a deferred payment agreement”.
16. The Council wrote to Mrs X when it learned her mother had died. It said it was going to take account of her father’s interest in the property he had owned with his wife in his financial assessment. The delay was not due to fault by the Council.
17. When Mrs X disputed the Council’s decision, it asked one of its officers to value Mr Y’s interest in the property. The Council should have obtained an independent valuation. The failure to do so was fault, despite the Council arguing that the officer who did the valuation was independent as they don’t work for adult social care.

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Agreed action

18. The Council has agreed, within four weeks, to commission a valuation (from someone not connected to the Council) of Mr Y’s interest in the property which takes account of the fact it did not meet the minimum energy efficiency standards when Mrs Y died.
19. The Council should provide us with evidence it has complied with the above action.

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Final decision

20. I have completed my investigation on the basis there has been fault by the Council causing injustice which the Council has agreed to remedy.

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Investigator's decision on behalf of the Ombudsman