Not upheld: Investment mis-selling complaint against JAMES HAY ADMINISTRATION COMPANY LIMITED

Decision detail

Summary

Mr M complained about JHP's management of his SIPP's commercial property investment, alleging failures regarding lease negotiations, rental rates, and property alterations. The ombudsman found issues 1 and 4 were outside jurisdiction as they were out of time and had been previously addressed by the Pensions Ombudsman. On the merits of issues 2 and 3 within jurisdiction, the ombudsman found JHP acted reasonably: the £22,000 annual rent agreed in June 2022 was based on a 2019 independent surveyor valuation that remained current and did not require review until 2024; JHP's decision not to pursue full rent arrears recovery was reasonable given the protracted negotiations and urgent need for rental income; and the mezzanine alteration had been agreed by Mr M in 2016 and was confirmed as satisfactory by surveyors. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman found that JHP acted reasonably in using the 2019 surveyor valuation of £22,000 for the 2022 lease, as routine valuations were only required every five years and the surveyors maintained their 2019 valuation in 2021. The 2023 valuation cited by Mr M was obtained after the lease and therefore unavailable to JHP at the time of agreement. Regarding rent arrears, while JHP made efforts to recover them through 2020-2021, the protracted negotiations and urgent need for rental income made it reasonable to concede this point rather than prolong negotiations further. For the mezzanine issue, Mr M had himself agreed to its removal in 2016 Heads of Terms, the 2022 lease terms mirrored this, and surveyors confirmed the replacement was satisfactory and that mezzanines have minimal value.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website