Not upheld: Service failures generally complaint against Castle Trust Capital PLC

Decision detail

Summary

Mr G and Mrs G applied to CTC for a £840,000 commercial bridging loan secured against two properties, with one to be purchased and one already owned. During the application process spanning June to October 2024, CTC requested various information and documentation, re-underwritten the loan when Mr G became self-employed, and required Mrs G to obtain independent legal advice on separate legal issues. Mr G and Mrs G made several changes to the lending proposition, including adding Mrs G as joint owner of the new property and later proposing to split the loan with a Limited company SPV. When CTC indicated that the proposed restructuring would require new applications with fresh underwriting, Mr G and Mrs G withdrew their application. The ombudsman found that CTC's requirements were reasonable for a commercial transaction and that Mr G and Mrs G chose to withdraw; therefore, the complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that CTC's requests for information and documentation were reasonable for a commercial lending transaction. The standard 'Borrower Consents' clause in the loan agreement did not need amendment when Mr G became self-employed as it is standard wording. CTC properly re-underwritten the loan when Mr G's employment circumstances changed. The requirement for Mrs G to obtain independent legal advice on two separate legal issues was justified and not CTC's responsibility to approve. The valuation was conducted by a suitably qualified surveyor and CTC gave Mr G and Mrs G fair opportunity to challenge it. The addendum conditions regarding renovation works were reasonable risk management for a commercial loan. CTC did not force the addition of Mrs G's name to the property purchase; this was Mr G and Mrs G's choice which changed the lending requirements. When Mr G and Mrs G proposed substantial restructuring of the loan, CTC's requirement for new applications with fresh underwriting was reasonable. Mr G and Mrs G chose to withdraw the application; this was not due to CTC acting unfairly.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website