Not upheld: Service failures generally complaint against Hampshire Trust Bank Plc

Decision detail

Summary

S, a company represented by its director Mr E, complained that Hampshire Trust Bank Plc caused delays in considering its loan application for a complex airspace development project, resulting in financial loss. The application process spanned approximately 18 months from January 2022 to July 2023, during which time S paid commitment fees of £26,470 and professional fees totalling approximately £58,765.26, ultimately withdrawing the application and obtaining funding elsewhere. The ombudsman found that while the process was lengthy, it was not unreasonably delayed given the complexity of the transaction, including issues with Section 5 Landlord and Tenant Act notices that were poorly drafted by S's agents and required multiple revisions until January 2023, as well as legitimate planning concerns regarding the ground floor element. Although Hampshire acknowledged poor service due to staff turnover, the ombudsman found no material delays attributable to Hampshire or its solicitors and determined that S was bound by the contractual terms making the commitment fee non-refundable and S responsible for professional charges regardless of loan drawdown. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that while the application took 18 months from January 2022 to July 2023, this was not unreasonable given the complexity of the transaction. The development involved an atypical airspace scheme with existing tenants, requiring careful legal work including Section 5 notices that were initially poorly drafted by S's agents. Between January and June 2022, there was no evidence of material delays. Between June 2022 and January 2023, both solicitors were actively engaged in correspondence addressing legitimate issues, particularly the Section 5 notices which were not properly drafted until January 2023. Between January and June 2023, Hampshire's requirement for updated reports was reasonable, and the ground floor planning issues were genuine concerns that necessitated revised terms in June 2023. The ombudsman rejected the argument that Hampshire unilaterally cancelled the January 2022 offer, finding instead that the scope of the development changed due to planning issues. Regarding financial loss, the ombudsman found that S agreed to terms making the commitment fee non-refundable upon acceptance and making S responsible for professional charges regardless of drawdown. Hampshire's solicitors were not found responsible for significant delays, so there was no fair basis to require refund of their fees.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website