Not upheld: consent to let (CTL) application - conditions imposed on approval complaint against Lloyds Bank PLC

Decision detail

Summary

Mr and Mrs L, operating as a business partnership, applied to Lloyds Bank PLC for consent to let on a property that served as security for their borrowing. Lloyds agreed to grant CTL but imposed conditions that the complainants considered excessive and unreasonable. After the borrowing was repaid and the charge released, Mr L complained about the decision and resulting loss of rental income. Lloyds paid nominal compensation for service delays but defended its CTL decision. The ombudsman found the decision was fair and within Lloyds' commercial discretion, and that the bank had not treated the complainants unfairly compared to other similar commercial customers.

The Ombudsman's reasoning

The ombudsman determined that Lloyds, as the party being asked to assess and manage a variation in risk, was entitled to exercise its discretion in imposing the disputed conditions. The ombudsman's role is not to substitute their commercial judgement for that of the bank or to second-guess how Lloyds assessed the risk. The complainants had a choice between complying with the conditions or aborting the transaction. While Lloyds could have handled matters more efficiently and timely, the decision itself was fair and the bank had already paid appropriate compensation for service delays.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website