2nd house/sitting tennants problem

SquatNow

Wasn't her ex-husband effectively paying the rent for them?

clutton_2

go to a solicitor on MONDAY - there is no other way to deal with this.

having made one utterly disastrous decison to buy a mortgage for someone else's benefit, then she must not make any more decisions without proper legal advice.

TAKE HER TO A SOLICITOR -IF NECESSARY DRAG HER THERE !!!!

Fredolsen

Thank you every one.

As I mentoined earlier I do plkan on getting her to a solicitor and will show her the comments in this forum. To answer a few questions....

The propertys in existance are my sisters and the one she purchased which M&D are living in.

I really don't know what the agreement is/was as this has all been news to me within the last few days but I shall see my sister next week and would hope that whatever the agreement is that she can take some comfort from the info on this thread.

NO, the ex husband paid nothing.

Once again all, thanks for the input and I'll post an update whenit happens.

Fred

franklee

Your sister needs to dig up all paperwork she signed for this to happen, if it was done with paperwork. Granting someone the right to live rent free in a property for life is typically called a lease for life. Try goggling for that term. It's quite complicated and has implications for all sorts of things including inheritance tax. You may have to phone round a bit till you find a solicitor who is happy to advise on this. But as everyone has said you need professional advice. Basically it's madness to do something like this formally if you can't afford to see it through, was it done formally with a written agreement? If so then parents in law will probably have a claim against sister if the property is repossessed otherwise they probably can't be evicted. She could sell the property to an investor but the parents in law's rights will significantly devalue the property. Even if there is no formal agreement you'd still need to take into account the reduced price that the parents in laws property was purchased for. Meanwhile make sure the insurance especially buildings insurance on the property is kept up to date. Buildings insurance is probably sisters responsibility.

tbs624

franklee wrote: »

Basically it's madness to do something like this formally if you can't afford to see it through,

It probably didn't seem like madness to them at the time, helping family, and all that....

franklee wrote: »

... was it done formally with a written agreement? If so then parents in law will probably have a claim against sister if the property is repossessed otherwise they probably can't be evicted. She could sell the property to an investor but the parents in law's rights will significantly devalue the property. Even if there is no formal agreement you'd still need to take into account the reduced price that the parents in laws property was purchased for. Meanwhile make sure the insurance especially buildings insurance on the property is kept up to date. Buildings insurance is probably sisters responsibility.

Whoah, Franklee, it's not much good us all saying " go get qualified legal advice for this " and you agreeing but then go running on with ifs, buts, and possible scenarios is it? Look back at that first post- there's a marriage breakdown at the root here, and Fred's sister needs professional guidance for the whole package. Family/matrimonial lawyers are frequently well-versed in related property & inheritance issues, and if they're in doubt they know which colleagues to call on.

tbs624

Fredolsen wrote: »

Thank you every one.

As I mentoined earlier I do plkan on getting her to a solicitor .....

Good plan -qualified lawyer very definitely needed - some things can be talked through via a forum but this is not one of those, as there are too many strands. If your sister is in financial difficulty start here for free legal advice http://www.clsdirect.org.uk/ 0845 345 4 345, and for finding a lawyer. There’s a search facility for both legal topic and postcode (or try the Law Society as I mentioned before) The breakdown of the relationship is key here so look for a good family lawyer - they tend to have a firm grip on related property matters anyway, and if they don’t they’ll know who to link up with. Your sister can ask for an initial Fixed Fee appointment for around £50.

franklee

tbs624 wrote: »

It probably didn't seem like madness to them at the time, helping family, and all that....

IF the agreement was done formally I hope any solicitor involved made quite clear the considerable obligations that were being taken on! The problem with life tenancies is that the lives of those drawing up the agreement move on in unexpected ways, divorce, dying before the life tenant etc. So it isn't something to take on lightly as it is so easy for those left behind to be left in the lurch.

tbs624 wrote: »

Whoah, Franklee, it's not much good us all saying " go get qualified legal advice for this " and you agreeing but then go running on with ifs, buts, and possible scenarios is it? Look back at that first post- there's a marriage breakdown at the root here, and Fred's sister needs professional guidance for the whole package. Family/matrimonial lawyers are frequently well-versed in related property & inheritance issues, and if they're in doubt they know which colleagues to call on.

I totally agree it's all tied in to the divorce but after that point had already been made the OP is posted again in order to chivvy sister to a solicitor so specifically asked for some ideas what sister may be getting into with the life tenants issue:

Fredolsen wrote: »

Once again, very grateful for any help and the more info I can get the better and I will try and convince her to go and see a solicitor but I feel at the moment that if there is something that can help her with the dilema within this forum than she may find strength in it and indeed go to a solicitor more confident. Fred

When I was seeking advice on just such a matter (about a lease for life, not divorce) it did take a bit of work to obtain a solicitor competent in the field. My small usual solicitor could not take it on, it it needed a medium sized firm. A large firm also involved knew less about it than I did almost costing us 30K for a silly mistake they made but that I spotted, which is why I had to seek a second opinion.

So it does pay to be aware of some of the issues IMO just as background which seems to be what the OP wants. The sisters position will obviously depend on the details on the agreement signed so we can just mention some of the issues to look out for. Obviously we do not expect the OP to post specific details of the agreement and none of the posts replace professional advice but that has already been stated several times in the thread already too so I am sure the OP is aware of this.

tbs624

franklee wrote: »

So it isn't something to take on lightly as it is so easy for those left behind to be left in the lurch.

...and as it looks as though it may already been taken on here.....stable door...bolted horse

franklee

tbs624 wrote: »

...and as it looks as though it may already been taken on here.....stable door...bolted horse

Eh? Sorry you'll have to explain that one.

franklee

Fredolsen,

The more I think about this the less it makes sense.

Given:

M&D have the "right" to live in the property rent free for life in exchange for selling the property to S below market value. S took out a mortgage to buy for about half the current market value of the property. There are some legal agreements for the tenancy.

The questions puzzling me are:

How was this achieved given it would be pretty hard to raise a mortgage on a property with tenants who have the right to live there rent free for life. How did S manage to get a mortgage? Did she inform the lender of the life tenants? What type of mortgage is it residential/BTL/something else?

When S purchased the property was that all done formally, transferring it into her name at the land registry etc? If so was a solicitor involved and was he told about the arrangement with the life tenants and the discount? Did he explain the ramifications? Did he draw up a tenancy agreement?

When you say S purchased at a discounted price, how much below market value do you mean? If it was much below market value then surely M&D would have wanted some assurance they would not be asked to pay rent or be evicted? If it wasn't much of a discount then the rent free for life would seem too much to give in exchange.

How long ago was all this? Do M&D have much of the cash they were given left? Can they buy the property back at the same discount?

Are M&D the grandparents of S's children and on good terms with S. Do they have any idea that S is struggling to pay the mortgage? Would you expect them to take an eviction should the property be repossessed without wanting compensation for loss of the rent free tenancy?

Roughly how old are M&D?

Who is responsible for paying for structural repairs and maintenance on the property, M&D or S?

If the mortgage lender was not informed of the life tenants then S may be in even more mess. Perhaps the rent free for life bit was done informally without telling the professionals dealing with it or they would have raised a concern at least about the mortgage. If it is informal then it seems M&D would be the ones to lose out if they cannot prove a claim to the rent free life tenancy.

That's more for you to think about ... If the tenancy agreement was written then you and S need to read it.