Upheld: Mortgage administration / arrears handling complaint against Barclays Bank UK PLC

Decision detail

Summary

Ms A complained that Barclays failed to register a legal charge on her buy-to-let property (BTL1), which prevented her from obtaining a second charge loan needed to buy out her ex-partner's share of another property (BTL2) under divorce court orders. Ms A claimed this caused her significant financial losses including lost rental income and property growth over 20 years. The ombudsman found that Barclays did make an error in not registering the charge, but concluded that Ms A would not likely have obtained the second charge loan in time to meet the court deadline even without the error, due to the tight timeline, her health issues, and disputes with her ex-partner over property valuation. The ombudsman upheld the complaint but awarded only £750 for distress and inconvenience, rejecting claims for speculative financial losses.

The Ombudsman's reasoning

Although Barclays made a clear error in not registering the charge, the ombudsman found that Ms A would not likely have been able to secure the second charge loan in time to meet the court-ordered deadline of 30 May 2025 to buy out Mr A's share, even without Barclays' mistake. The timeline was too tight, Ms A had health issues preventing her from arranging finance earlier, and there were substantial disputes with Mr A regarding property valuation that would have been difficult to resolve within the deadline. Furthermore, Ms A did not contact Barclays about the charge problem until after the March 2025 notice deadline had passed. The ombudsman also found that Ms A has not suffered the financial losses claimed because assumptions about speculative property growth and future rental income cannot be awarded, and the ongoing mortgage payments are a result of the subsequent court order giving Mr A control of the sale, not Barclays' error.

How this compares

Source

Read the original decision on the Financial Ombudsman Service website