Not upheld: Mortgage administration / arrears handling complaint against ALLICA BANK LIMITED

Decision detail

Summary

Mr T, trading as R, applied for a commercial mortgage with Allica Bank in July 2022. The original offer (£163,200 at 4.99%) expired 2 November 2022, and a revised offer (£140,760 at 4.99%) issued 15 September 2022 had the same expiry date. R complained that Allica's solicitors caused delays, the 49-day completion window was insufficient, and he was not notified of the expiry until February 2023, by which time the rate had increased to 7.05%. R sought the original rate to be honoured and £50,000 compensation. The ombudsman found that while some delays occurred, R failed to provide required documentation (security documents and fire risk assessment) in a timely manner, and even with an extension to 2 December 2022 (which Allica said they would have granted), completion would not have been possible. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while Allica's solicitors experienced some delays in responding, the primary cause of the failure to complete was the non-provision of required documentation by R, particularly the original security documents and fire risk assessment. The ombudsman noted that even if the mortgage offer had been extended to 2 December 2022 (as Allica stated they would have done), R would not have been able to complete by that date because the required documentation had not been provided. The ombudsman also noted that the mortgage was a commercial (unregulated) loan, so there were no regulatory requirements regarding the length of the offer validity period. The ombudsman concluded that Allica acted fairly and was not responsible for the overall delays or the failure to complete.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website