Partially upheld: SIPP trustee conduct, fee retention without consent, poor communication and complaint handling complaint against James Hay Administration Company Limited

Decision detail

Summary

Mr L complained to the FOS about JH's handling of legal matters relating to a commercial property lease held within his SIPP. JH had instructed Firm X (a panel solicitor) to handle the lease transaction, which was completed on 13 May 2025 after complications including a former tenant's interim injunction application and a new tenant's inability to confirm funds. Firm X retained £2,366 from completion monies for its fees. When Mr L complained to JH about this retention in May 2025, JH's property team did not engage with him by phone, leading Mr L to initiate a legal claim. JH subsequently reimbursed the £2,366. The ombudsman found JH's reliance on Firm X's legal advice was reasonable and did not uphold complaints about delay or fee reasonableness, but found JH's communication with Mr L regarding his legitimate concerns was inadequate and awarded £200 compensation for the trouble caused.

The Ombudsman's reasoning

The ombudsman found it reasonable for JH to rely on Firm X's professional legal advice regarding the complications in March and April 2025, including the former tenant's interim injunction application and the new tenant's inability to confirm funds. Therefore, JH did not cause unreasonable delay in completing the lease. The ombudsman also found no evidence that JH should have questioned Firm X's fees at the time they were paid, as there was no compelling evidence Mr L himself was unhappy with the fees until after completion. However, the ombudsman found JH's communication with Mr L in May 2025 regarding his legitimate concerns about the fee retention was inadequate, with calls and emails not being returned as they should have been. While JH was entitled to manage communication preferences, it should have managed Mr L's expectations more clearly. The ombudsman rejected the argument that Mr L was forced to pursue legal proceedings, noting he had made a complaint to JH and could have waited for the response or brought a complaint to the ombudsman service rather than initiating legal action.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website