Not upheld: failure to obtain consent from existing charge holders; breach of lease conditions complaint against Tandem Home Loans Limited

Decision detail

Summary

Mr B complained that Tandem Home Loans Limited failed to obtain consent from his shared ownership landlord and first charge mortgage lender before registering a unilateral notice for a secured loan in April 2023. This breach of his lease terms subsequently prevented his remortgage and staircasing application. The ombudsman found that Mr B, not Tandem, bore responsibility for ensuring compliance with his lease conditions, as the Legal Charge and terms and conditions explicitly required him to comply with prior charges and lease terms. Although Tandem registered a unilateral notice rather than a second legal charge, there was no legal requirement to do otherwise. The complaint was not upheld.

The Ombudsman's reasoning

The ombudsman determined that it was Mr B's responsibility, not Tandem's, to ensure compliance with the conditions of his shared ownership lease and first charge mortgage. Although Tandem registered a unilateral notice rather than a second legal charge, there was no legal requirement to do otherwise. The Legal Charge and terms and conditions explicitly required Mr B to comply with prior charges and lease conditions. The advice regarding suitability was provided by an independent mortgage broker, not Tandem. The ombudsman assessed the case on fairness and reasonableness rather than strict legal liability and found Tandem acted fairly in lending the money and registering the notice without obtaining prior consent.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website