The Ombudsman's final decision
Summary: Mr X complained the Council failed to provide local land charge search results following a cyber attack. He said it caused delay in the sale of his property. The Council failed to provide a service, but its response limited any injustice to Mr X.
The complaint
Mr X complained the Council failed to provide local land charges search results following a cyber attack in December 2021. Mr X agreed to sell his property and the buyer submitted searches in February 2022. The buyer did not receive the search results and could not complete the sale. Mr X put the house back on the market and sold the property to a second buyer who submitted searches in May/June 2022. The new/second buyer received the search results and completed the sale. The delay in processing the searches in February delayed the sale of Mr X’s house. This caused Mr X stress and cost him money as the property was empty and he still had to pay bills.
The Ombudsman’s role and powers
We investigate complaints of injustice caused by ‘maladministration’ and ‘service failure’. I have used the word fault to refer to these. Service failure can happen when an organisation fails to provide a service as it should have done because of circumstances outside its control. We do not need to show any blame, intent, flawed policy or process, or bad faith by an organisation to say service failure (fault) has occurred. (Local Government Act 1974, sections 26(1), as amended) If we are satisfied with an organisation’s actions or proposed actions, we can complete our investigation and issue a decision statement. (Local Government Act 1974, section 30(1B) and 34H(i), as amended)
How I considered this complaint
As part of the investigation I have considered the following: The complaint and the documents provided by the complainant.
Documents provided by the Council and its comments in response to my enquiries.
Government guidance on local land charges.
Mr X and the Council had an opportunity to comment on my draft decision. I considered their comments before making a final decision.
What I found
What is a local land charge?
A local land charge is usually a financial charge or restriction on land. Charges affect current and successive owners of the land.
The charges are listed on the local land charges register which the council updates and maintains.
A local land charge search will show whether a property has any charges.
A buyer of a property will buy the property subject to the charge. A buyer usually carries out a local land charge search before buying a property so they are aware of potential charges.
There are two ways of carrying out a local land charge search, either official searches, or personal searches of the register.
The search request is a list of questions. The search report provides the answers.
The Council’s policies and procedures The Council carries out both official searches and personal searches of the Local Land Charges Register.
Official searches The Councils website explains its officers are responsible for keeping the Local Land Charge Register and deal with official searches. The team ensure the information in the search report is relevant and accurate.
The Council receives official searches directly via email or through a portal.
A fee for official searches is paid directly to the Council.
On receiving a search request, the team reviews the application, registers it on the system and banks the fees.
The Council holds some information and provides responses to these questions internally. Some information is held by other agencies, for example Highways and Building Control. The Council requests the information from these agencies so it can answer the questions on the search.
The Council updates the system as the responses come in. An officer double checks the information and prepares the report. The Council sends the report to the requester in the same way they submitted the request.
Personal searches The Councils website explains a personal search allows for the inspection of the Local Land Charges Register. This can be carried out by anyone but it is usually private search companies on behalf of their clients.
A personal search agent (Agent) submits a personal search request by email to a specific email address. The request must include a red edged plan.
Each Agent may submit five requests per day and provide a minimum of 48 hours notice. The Council does not charge for personal searches.
The team reviews the search requests each day and searches the system for the information. The team email the results to the Agent.
What happened I have summarised below the key events; this is not intended to be a detailed account.
The Council experienced a cyber attack in December 2021. This effected several services including local land charge searches.
The Council quickly told known Agents (including the first buyer’s Agent) about the cyber attack and that it could not process searches.
In early January, the Council updated its website to say it could not process and complete searches because of the cyber attack. It also advised buyers and sellers to consider buying indemnity insurance to enable property transactions to continue.
Mr X said his buyer’s Agent sent a search request in early February 2022. The Council does not have a record of this. The Council does have a record of a personal search request later the same month.
Mr X emailed the Council at the beginning of March asking for help with the search. The Council replied saying they could not process searches.
Mr X’s estate agent telephoned the Council in late March chasing the search results. The Council said the time frame for searches was between four and six weeks. As part of its complaint response, the Council said this information was given accidentally by customer services to Mr X’s estate agent and was an indicative timescale for internal use only.
In May, Mr X’s buyer decided not to continue with the sale. Mr X says this is because of the delay in receiving the Councils search results. Mr X put his house back on the market.
Mr X found a new buyer for his property.
The Land Registry agreed to work with the Council to complete personal searches based on historic data whilst the Councils systems were down. The Council informed the Agents in May (including Mr X’s second buyer’s Agent), and the system became operational in June.
Mr X’s second buyer’s agent sent a personal search in June. The Council processed the search and provided the results. Mr X sold his property.
Mr X complained to the Council Mr X complained to the Council. The Council issued a stage one response at the end of March 2022. It explained it could not access its systems to process searches because of the cyber attack. The Council apologised for the inconvenience. It could not give a date when the system would be operational.
Mr X asked for his complaint to be escalated to stage two in the middle of April.
The Council issued a stage two complaint response at the end of April. This went to Mr X’s junk email folder. The Council resent it in early May following a request from Mr X. The response explained the Council was still unable to process the searches and had communicated this to Agents and on its website. The Council had advised parties to seek legal advice about seeking indemnity insurance to enable house sales to progress. The Council also explained its Customer Services team accidentally gave the timescale to Mr X’s estate agent. This was an indicative timescale for internal use only and the Council apologised for the confusion it caused. The Councils letter also said it could not give Mr X a reduction in Council Tax.
Mr X complained to the Ombudsman at the beginning of May 2022.
Analysis The Council could not complete local land charge searches from December 2021 to June 2022. This is a significant amount of time when essential Council services were not functioning. This is service failure, this is fault.
In the Council’s response to my enquiries, it said ‘The incident and its significant impact was out of the Council’s immediate control’. The fault was not internal and the Council could not control it. Rather it was ‘caused by a very sophisticated cyber incident’. It was external influences that caused the Councils systems to go wrong and lead to the failure of the service.
The Council reported itself to the Information Commissioners Officer (ICO) and worked closely with the ICO, the National Crime Agency and the National Cyber Security Centre. Following the cyber attack, the Council has taken the correct steps to report the matter and help with investigations.
The Council quickly contacted known Agents (including the first buyer’s Agent) and told them of the cyber attack. The Council explained search information was not available. Agents were aware they could not carry out searches and should have made their clients aware of this. The Council are not at fault for the Agents accepting work from clients when the Agents were aware they could not provide the information.
The Council updated its website to tell the public about the cyber attack and explained some if its services were affected, specifically local land charges. It said both personal and official searches could not be processed. Mr X was therefore aware his buyer would not be able to process the local land charge search.
On its website, the Council recommended buyers and sellers explore indemnity insurance to enable property transactions to continue. The Council suggested ways individuals could proceed with house sales by suggesting alternatives.
Mr X was aware of the situation and the options available to him. He knew the buyers Agent could not complete a local land charge search which would prevent the sale from progressing. He also knew he, or his buyer, could take out indemnity insurance to allow the sale to advance in the absence of a local land charge search result. Mr X said his buyer’s lender would not accept indemnity insurance and the sale could therefore not proceed. The Council suggested suitable solutions to limit any injustice, it is unfortunate that this was not accepted by the buyers lender but that was outside the Council’s control.
Mr X says the reason the sale did not continue was because of the Council’s failure to provide the local land charge search report. I do not know the reason why Mr X’s first buyer pulled out of the sale. The local land charge search is only one element of the conveyancing process. I therefore cannot link the Councils failure to provide search results with delay in the overall sale process.
The customer services team gave misleading information to Mr X’s estate agent about timescales for when the system would be operational. The Council has apologised. This was not best practice, but I do not consider this to be significant enough to be fault.
The Council accepts it could not process local land charge searches and has apologised to Mr X.
The Council failed to provide a service, this is fault. The way the Council dealt with matter following the cyber attack went as far it could to limit the injustice caused to Mr X. The Council has apologised to Mr X, I find this a suitable remedy.
Final decision
I have completed my investigation.
The Council failed to provide a service, but its response limited any injustice to Mr X. The Council has apologised to Mr X which is a suitable remedy.
Investigator's decision on behalf of the Ombudsman