Upheld: administrative error - failure to remove legal charge from property title complaint against Bank of Scotland Plc

Decision detail

Summary

Mr G complained that Bank of Scotland Plc failed to remove its legal charge from his property title after his mortgage was repaid in May 2022, which delayed his re-mortgage and incurred additional legal costs of approximately £1,500 plus £3,500 in bridging loan interest. BOS accepted the error and paid £100 compensation, but Mr G was dissatisfied and escalated to the FOS. The ombudsman upheld the complaint in part, finding that while BOS was at fault, only £210 in legal fees (plus VAT) could be directly attributed to the failure to remove the charge, as the majority of increased costs resulted from unrelated work such as arranging a new lease. The ombudsman confirmed the £100 distress and inconvenience payment was fair and reasonable, and rejected claims for bridging loan interest and hypothetical damages.

The Ombudsman's reasoning

The ombudsman determined that while BOS made an error in failing to remove the legal charge, not all costs claimed by Mr G were attributable to this failure. The solicitors' timesheets showed that much of the increased legal work was due to the need to arrange a new lease and comply with other lenders' regulatory obligations, which were unrelated to BOS's charge. Only two specific timesheet entries totalling £210 could be directly attributed to work relating to BOS's charge. The £100 compensation for distress and inconvenience was deemed appropriate given the relatively short timeframe (2-16 May 2025) in which the issue was raised and resolved. The ombudsman rejected the claim for bridging loan interest and declined to award compensation for hypothetical scenarios that did not occur.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website