Summary: We will not investigate this complaint about the Council charging interest on a land charge agreement following works in default to private housing development. We cannot determine private contract disputes. It is reasonable for the complaints to seek a remedy in the courts.

The complaint

1. Mr and Mrs X complained about the Council delaying the payment and interest details of a contract which they signed and returned in June 2024 but did not receive payment instructions and interest amounts until August. They say that they could have started payment earlier with the correct information and that extra interest has accrued as a result.

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The Ombudsman’s role and powers

2. The law says we cannot normally investigate a complaint when someone could take the matter to court. However, we may decide to investigate if we consider it would be unreasonable to expect the person to go to court. (Local Government Act 1974, section 26(6)(c), as amended)

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How I considered this complaint

3. I considered information provided by the complainant and the Council’s response.
4. I considered the Ombudsman’s Assessment Code.

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My assessment

5. Mr and Mrs X say they agreed to a contract with the council following the failure of the developer of their street to complete street works and a pumping station. The Council worked with water utility company to arrange for works in default and the owners were subject to a charge on their property through the Land Registry to recover the costs.
6. The works were largely completed in 2023 and the owners received a copy of the contract from the Council to pay for the works to be charged to their property and interest added. Mr and Mrs X returned the signed contract in June 2024 but they say they were not advised about the payment method or the interest amounts until August. As a result, they say they incurred additional interest costs.
7. The Council says that it had to draw up separate legal contracts with 14 owners and that it allowed an interest-free period from when the works were complete until May 2024 for the residents. It will not agree to reduce the amounts charged in the contract terms.
8. Although the works in default were the result of an enforcement action against all the owners, the contract was to allow the Council to register Land Registry charges. The Council apologised for any delay in responding but did not have to reduce the outstanding amounts.
9. We cannot determine disputes about private legal agreements between local authorities and individual householders. The works in default were recoverable and interest could be charge for the completed works according to the Council’s records. If the complainants believe there were unnecessary legal delays they would need to seek legal advice about reducing the amount payable.

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Final decision

10. We will not investigate this complaint about the Council charging interest on a land charge agreement following works in default to private housing development. We cannot determine private contract disputes. It is reasonable for the complaints to seek a remedy in the courts.

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Investigator's decision on behalf of the Ombudsman