Paratus AMC Limited · DRN-6193429

The complaint S, a limited company, complains about how Paratus AMC Limited trading as Foundation Home Loans managed its mortgage applications for two properties in the same building. S said the surveys reached different conclusions on fire safety, which must be wrong. Miss H brings this complaint on behalf of S. What happened Miss H told us that S purchased two properties in the same building. Both were in need of repair work, but one was mortgageable, the other was not. So S bought one of the properties with a mortgage from Paratus. S bought the other with a bridging loan, intending to remortgage with Paratus once the repair work was done on that property. The mortgage for the first property was concluded with no major difficulties. But when S asked to remortgage the second property, in order to clear the bridging loan, the valuer Paratus hired raised concerns about the cladding external to the building. Miss H said that one or other of the valuers must have made a mistake. When Miss H first raised this complaint on behalf of S, it wasn’t clear whether Paratus would offer S a mortgage on the second property or not. It has since been possible to resolve the concerns around cladding, and S has secured a mortgage with Paratus on the second property. Miss H says that one or other of the valuers had clearly got things wrong. She has argued strongly that Paratus is responsible for whatever mistake was made. Paratus said it had engaged valuers with appropriate professional qualifications to carry out valuations on the first and then the second of S’s properties. It acknowledged there was a difference between the initial responses of these two valuers, but said the concerns about the second property had been resolved, and Paratus had been able to lend on both properties. Paratus said that it isn’t qualified to assess the value of a property, so it relies on the professional opinion of the valuer. Paratus said it is entitled to do that, and felt it was reasonable for it to follow the advice which was given by an expert in the field. Paratus said that it had simply acted in line with the information it had been given. Paratus said it understood Miss H had raised the same complaint with the valuation firm, which had confirmed it wasn’t liable to S for its decisions. Miss H then confirmed S’s revised position, once both of its properties had been mortgaged with Paratus. She said that if the survey for the first property had been properly completed, S would not have bought it. S would still have purchased the second property, because there was no survey done to offer S the bridging loan finance to buy that. But S would have looked elsewhere for another property rather than buy the first. Miss H also said that S had planned to remortgage property one, after the property was

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refurbished. She said S would have done this after only about four weeks, but had been forced to pay the original mortgage for six months, before being able to remortgage elsewhere. Most lenders won’t allow a remortgage within six months of purchase, but Paratus would. Miss H wanted Paratus to pay S the survey fee it had paid for property one, refund six full mortgage payments for property one, and pay additional borrowing costs to cover the business loans S had to take out, while waiting for problems with the second property to be resolved. She also wanted Paratus to pay £2,000 in compensation for the impact all this had on her personally. Our investigator didn’t think this complaint should be upheld. He said that our service cannot consider a complaint about what the valuers did. They don’t fall within the jurisdiction of our service. We can only look at what the lender, Paratus, did here. Our investigator said the sole function of a valuation is to enable a lender to assess the suitability of a property as security for the proposed loan. Although S paid a fee for the valuation, the service it received for that fee, in each of the above instances, was a decision from Paratus on whether it was willing to lend against the security of the property, and how much. Paratus had hired a suitably qualified valuer each time, and had no reason to think those valuers were not competent. Paratus decided to lend on the first property, as no issues were raised in the valuation. Paratus later asked for further checks on the second property, when concerns were raised about fire safety. Our investigator said Paratus had then carried out an investigation into S’s complaint, and appealed the valuation, which led to S being granted a mortgage on the second property. Our investigator said he hadn’t been able to identify any errors or mistakes made by FHL, and we just couldn’t look at whether the valuers had made mistakes. Miss H replied on behalf of S, to disagree. She said it had become clear since, that the first valuer had not carried out the checks which his professional body requires. And if he had done so, the concerns raised for property two would also have been raised for property one. She said that meant the first valuer was negligent, and couldn’t possibly be considered a suitably qualified valuer. She said she had referred this to the professional body, which was investigating. But she said we should reconsider, because Paratus had instructed a valuer who, for these reasons, was not professionally fit to carry out the survey on property one. Our investigator didn’t change his mind. He said Paratus hadn’t been aware of anything to suggest a lack of competency on behalf of this valuer when his firm was instructed. Miss H then wrote again, to say that the complaints body which oversees this survey firm had refused to look at her complaint. She said this complaints body said her contract is with Paratus and not with the survey firm. Miss H said that would make her complaint valid. Because no agreement was reached, this case came to me for a final decision. What I’ve decided – and why I’ve considered all the available evidence and arguments to decide what’s fair and reasonable in the circumstances of this complaint. Firstly, Miss H will have noted that my decision refers to this as S’s complaint, although I understand our service has previously addressed this complaint to Miss H. It’s my view that

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this complaint is properly brought by S, the limited company which owns both of the Buy To Let (“BTL”) properties, and which contracted with Paratus to mortgage each of those properties. Miss H represents S when she brings this complaint. She would not be able to bring this complaint in her personal capacity, as Miss H herself doesn’t have the required customer relationship with Paratus. That distinction does have an impact on what our service can consider. Miss H asked us to think about the impact of these issues on her, and mentioned recent health concerns, which she said had been exacerbated by the stress of these events. As this complaint is properly brought by S, not by Miss H, our service is unfortunately unable to consider any distress or inconvenience experienced by Miss H personally. Before I turn to the merits of this complaint, I am also aware I’ve summarised the events surrounding this case in less detail than the parties involved. No discourtesy is intended by my approach which reflects the informal nature of this service, as well as recognising that this complaint was referred when a number of issues were unresolved, and these have now been settled. I want to assure all parties I’ve read and considered everything on file. I’m satisfied I don’t need to comment on every point raised to fairly reach my decision. And if I don’t comment on something, it’s not because I haven’t considered it. It’s because I’ve focused on what I think are the key issues. I’ll now turn to the merits of the complaint. And I’m sorry to have to tell Miss H that I’ve reached the same overall conclusion on this complaint as our investigator. I don’t think the complaint she brings on behalf of S should be upheld. As our investigator said, we’re not able to consider a complaint about what the two valuers in this case did. Our service doesn’t have jurisdiction over survey firms. All our service can do is look at what Paratus did. Paratus didn’t reach its own decisions on the condition or value of either of these properties. It doesn’t have the required expertise. So it instructed valuers with the appropriate professional qualifications, who it reasonably considered did have the required expertise. I understand that Miss H has raised questions about this expertise since then, but I haven’t been able to see that Paratus should have been aware of such concerns when it hired either of these valuers. Paratus then relied on the professional opinions it obtained. It made lending decisions based on those valuations. And when Miss H, on behalf of S, questioned these decisions, it investigated, and found a way forward for lending on the second property. Paratus now appears to be satisfied that there’s no fundamental objection to mortgage lending on either of the two properties. I haven’t been able to see that any of the steps Paratus took here were unfair or unreasonable. I know that Miss H has grave concerns over the competence of the first valuer, but the later emergence of these concerns doesn’t mean that Paratus made a mistake when it relied on the valuation it received. Miss H says that if S had been alerted to the concerns about fire safety when the first mortgage was progressing, S would not have bought that property. She says S relied on the content of the first valuation report, which didn’t alert her to potential problems. But our

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investigator explained that valuation reports are provided for the lender alone, and although I understand copies were provided to S (as Miss H has referred to having considered their contents) the buyer isn’t supposed to rely on them. I can see that both of the valuation reports said this - “Important Notice to Applicant(s) 1. This report has been obtained solely to enable Paratus AMC Limited to determine whether the property is suitable security. 2. No responsibility to you is implied or accepted by Paratus AMC or the valuer by reason of the valuer's inspection and report for either the value or condition of the property. 3. The valuer has made this report without knowledge of Paratus AMC Limited's full lending criteria. It is NOT a structural survey and there may be defects which such a survey would reveal. You are strongly recommended to arrange a detailed independent survey to protect your own interests. 4. No responsibility to any third party apart from Paratus AMC Limited and its successors and assigns is accepted by the valuer in relation to this report.” In my view, this warning is clear – this report is not intended to be relied on by S, in making decisions about this purchase, and Paratus strongly recommends that S get its own survey. I think that’s important, because it means Paratus isn’t just saying it’s not responsible for the survey, after things have gone wrong. It told S this before the property was purchased, and said then that S should get its own survey. Considering all of the above, I can’t fairly and reasonably hold Paratus responsible for decisions S made about its purchases. I know Miss H will be disappointed, but I don’t think S’s complaint should be upheld. My final decision I don’t uphold this complaint. Under the rules of the Financial Ombudsman Service, I’m required to ask S to accept or reject my decision before 22 April 2026. Esther Absalom-Gough Ombudsman

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