Not upheld: mortgage management, LPA Receiver appointment, shortfall debt recovery, sale price, correspondence handling complaint against Wave Lending Limited

Decision detail

Summary

Mr S complained about Wave's management of his buy-to-let mortgage, specifically the appointment of LPA Receivers in 2017, the subsequent increase in arrears, the sale of the property in October 2020 for £428,000 resulting in a £184,000 shortfall, and Wave's pursuit of the debt. Mr S argued Wave should be held responsible for the LPA Receivers' actions and questioned whether the debt was statute-barred. The ombudsman found that LPA Receivers are legally the borrower's agents under the Law of Property Act 1925, not the lender's agents, and therefore Wave could not be held responsible for their actions. The sale price was not an undervalue based on comparable properties, and Wave had provided adequate documentation of how the debt arose. The ombudsman upheld only that Wave had failed to respond to correspondence in late 2024/2025, for which £75 compensation was deemed fair and proportionate.

The Ombudsman's reasoning

The ombudsman found that LPA Receivers are legally deemed to be the borrower's agents under section 109 Law of Property Act 1925, not the lender's agents, and therefore Wave cannot be held responsible for their actions. The appointment of LPA Receivers was reasonable given the long-standing arrears, tenant vacation, and risk of lease forfeiture. The sale price of £428,000 was not an undervalue when compared to comparable properties sold at similar times. Wave had provided adequate documentation showing how the shortfall debt accumulated. The limitation period issue is a matter for the courts, not the ombudsman. Wave's decision not to use email for security reasons is reasonable and in line with industry standards.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website