Summary 1

Summary 1

Area of law: Commercial property – sales/purchases

Complaint reason(s): Failure to advise

Remedy: Pay a refund of £172.50 in legal fees, £100 for failing to keep a file safe and £500.00 for distress and inconvenience – a total of £772.50

Outcome: Ombudsman’s decision accepted by the complainant

Mr and Mrs H employed a law firm to help them buy a property they planned to use for holiday lettings. They complained to us when, after the deal went through, they realised the title deeds meant they couldn’t use the house for that purpose. The couple were also unhappy that the firm had provided HM Revenue & Customs with the wrong information. In addition, they’d failed to deal properly with the post-completion stamping and registration formalities.

Our investigation found that the firm had made mistakes with the tax and registration paperwork. But the main issue for Mr and Mrs H was the substantial compensation they were looking for to cover losses they said resulted from buying a property solely for holiday lets, only to find they couldn’t actually do this.

We found that there wasn’t enough evidence to support their claim for loss of potential income. The Ombudsman told the couple that they would have needed to provide additional proof – such as evidence from the estate agents, a business plan, or information from specialist agents about the income they could have expected to achieve. Without this, the potential loss of income could not be considered. The Ombudsman also felt that Mr and Mrs H should have made their intentions explicit when they first employed the law firm.

Nevertheless, the Ombudsman decided that the law firm should refund £172.50 for failing to advise Mr and Mrs H fully, in writing, of the restrictions contained in the title deeds and for failing to deal with post-completion stamping and registration formalities. The Ombudsman also told the firm to pay £500 compensation for the distress and inconvenience caused, and another £100 for failing to keep their file safe.