Legal Charges- can they be for all the equity in a property?

Skidoobee

carefullycautious wrote: »

But surely if mums name is still on the deeds of the ex council house she could now in effect evict her son so she can return to live there? She really does need some legal advice about all this. This son certainly knew what he was doing families hey

Yes it is soley in her name [I've checked the land register] and this is a very interesting point; she has the right to move back to that house as I see it, and if not, to at the very least charge her son rent for living there, if only to claw back some of the money she's spent in the past on his behalf.

Whether she'll do that, considering the ins and outs of this particular family's 'dynamics' [groan] is another question entirely lol

Skidoobee

silvercar: The only reason that people sell at well below market value for quick sale is if they are themselves in a financial mess and need the money urgently. The fact that the son did this suggests that there is more to his finances than you are aware.

By the way, it is totally normal for these buy-me-quick companies to offer 12 month ASTs and promise to renew. If they are borrowing money it is usually all the lender will allow, so there is a safeguard in there in that the lender is acknowledging the tenany, making eviction with no notice unlikely.

Carefullycautious has a good point. There is nothing stopping the mother now returning to "her home", presuming that it is still in her name.

Yes I did think the sale at the time smacked of desperation.

As mentioned by a couple of posters though, this issue of legal ownership is a crucial one.

The house is solely in her name and there are two main issues over all this. The first is to find some financial redress and a secure home for the mother. With the help of people on here I feel confident now being able to get my head around how to tackle that.

There is the second issue though which, lets not be coy about it, is very important to the siblings. What happens when the mother dies?

It may seem cold hearted but there's no point beating about the bush- the estate of any deceased parent is of great importance to every single family.

So mother dies- pretty certainly it looks like, without a will. Isn't her estate in probate, then split between the next of kin, which is now four siblings? This means the house would be split four ways and would be shown as such on the title deeds, regardlewss of any charge on the property, which is effective only on sale anyway.

The house is then owned by four people. Son/brother remains resident but if he wants to sell, doesn't he have to get the permission of the other three joint owners? Can't any one of them veto the sale without demanding 'compensation' i.e. a share of the sale value? This seems like a classic ransom situation myself.

Skidoobee

kunekune:
It is the mother's house at law. She contributed at least the amount of the RTB discount, so it is partly her house at equity as well. Although there is a presumption, as I said, that someone who puts money into the purchase of a house retains a beneficial interest, but this can be rebutted. Initially I was thinking that it was hard to argue it was a gift but that's not the only possibiltiy. It's arguable that by putting a legal charge, the son was demonstrating that this was a loan, rather than a case of him taking a share of the house. If it was a loan, and your mother has paid it off, then it is now entirely her house again. The fact that nothing is in writing does not mean a court won't be persuaded. What mother needs to do now is get her house back. The son is NOT the legal owner, having a charge doesn't mean it is his house. The worry is that this is likely to be a slow and unpleasant process.

Thanks for this it puts in a nutshell what my scrambled brain has been trying to rationalise :T When I first heard the details of this charge I had a niggling feeling that it may look neat on paper, but something niggled me that if you looked at it closer, it just didn't seem to hold up [which was the purpose of starting this thread of course].

Your last sentence is so true though; I don't think my mother-in-law has the energy or wherewithal to pursue any process of redress, but for me personally the issue is one of common justice rather than the money [as a potential eventual benefactor my wife would of course disagree lol]. I just don't see how the son should be allowed to get away with this sort of practise; I wouldn't do it a friend or even an elderly tenant of my own, let alone my own mother.

Skidoobee

silvercar:
I read this thread and I still can't decide whether the family (the mum mainly) wanted to take advantage of the council discount to gain some easy money in years to come or if the son was trying to make a financial killing at others expense.

Posting in this undecided gain, I am posting as devil's advocate, mainly because no one is putting the son's views and its a useful discussion (also a lesson on family disputes).

It's very useful to have a devil's advocate, it's sometimes the only way to effectively develop your own position/viewpoint!

The emotive/personal issues are largely by the by but for the record the mother wasn't that bothered from what I can tell, about buying her house. She was 76 at the time, had lived happily there for 20 years and expected to see her years out in the house. Son saw an opportunity to buy the property at a good discount and ostensibly put up the money to help her buy it. He did it as a loan, not as a part buy into the property, because he charged her rent to cover the costs of his own extended mortgage to do the deal.


It could be that a legal charge for the whole amount was put on the property to prevent its sale to pay for care fees in the future.

Again this ostensibly was the motive but I would seriously question now whether that holds any legal water beyond covering his initial investment if challenged, when you consider he was only providing funds for part of the house purchase, not all of it. The balance [the RTB dicount] was effectively 'put up' by the mother, so she has claim to that as her own share in the property [at the very least].

It could be that the mother wanted to take advantage of the discount and wanted to swap houses to help her son. Maybe she didn't need the larger property and her son/s growing family did.

The 'house swap' [which the mother was not wholly enthusiastic about for above reasons] complicates things but I'm wary now of that being a bit of a red herring when it comes down to the legal nitty-gritty; there was never any formal, legal arrangement put in place to effect it.



In hindsight it isn't a risk. At the time it was a risk.

Quite right and this is recognised by the mother/siblings but again the money was put up as a loan and with every monthly repayment the mother made, that risk diminished further until it had eventually been repaid. I do not now see why the son should consider needing compensation now for any risk taken at the time [anymore than a bank/building society would].

There is no obligation to discuss finances with siblings. Mother has friends who buy and get discounts, sons offers to buy in her name, promises to look after mother, mother gets discount, son gets mortgage, they swap houses, both happy. Then son needs money urgently, sells his house to a quick-sale company, pays off his own mortgage, mother is a tenant, all OK until the company goes bust. Not really sons fault.

I have to entirely agree with the premise of all this. As I said I think in another post though, there are overlying issues. If the mother had lived rent free and not made any sizeable structural investment in either property, fair enough. However she did, without any financial compensation upon the sale of her sons' house for it and, despite having paid off the original loan to enable her to buy her own house, any financial claim now to her own house as the legal charge at present stands. As it is she has forked out 40k for nothing. She would have been better off putting it in the bank and/or going on a world cruise.

Suddenly the siblings come along and want to know why they weren't involved. Maybe their interest is only because the son is now living mortgage free and they would have liked some of the money? If the little scheme had failed would they now be bailing him out?

Of course it would be disingenous to say the siblings haven't got their eye on their mothers estate as well when she dies but hey, we are all human and who wouldn't have lol

The base point in all this though is that the mother has been fleeced of a lot of money by one sibling and at 87, is going through a process of eviction and although she has a house of her own, will have to go through ugly and probably protraced action to get to live in it again.

I repeat again, she has zero to show for all of her expenditure over the past ten years. That to my mind is injust and should be rectifed.

You have only my word for it but the siblings are not 'moneygrabbers.' As an 'outsider', I think over the years they have been very reasonable
[I'm being polite- I'd personally, say too complacent lol] with their brother over his actions in the past and if he'd been seen to 'do right' by his mum, they wouldn't now be making a fuss. It's funny you ask whether they would have baled him out if he'd hit problems in the past- this mad family probably would have lol:rolleyes:

silvercar

I don't know how you resolve this. You can't undo the past.

The son gained the discount that the mother was entitled to, but she couldn't get a mortgage to buy herself so she wouldn't have been able to get the discount herself, so maybe he took her discount without giving her anything in return. Then when he was in a financial mess she spent money on the property.


The son may have fleeced the mother (but see above).

The quick sale company fleeced the son, by buying at well below market value and keeping the equity.

The quick sale company fleeced the mother by going bust while she was a tenant.

A lot of shorn sheep around but now you have:

The mother needing a home and owning a home.

A son in financial mess and occupying a home rent free.

Siblings with their eye on their inheritance and looking out for their mother.

Either the mother needs to receive rent for the property so that she can rent a place of her own or she needs to move into her property - with or without the son's family.

dupplin

Re the Care home fees angle. There is no time limit on deprivation of assets, if the solicitor has actually documented that the son's reasons for wanting a charge on the property were to avoid paying care fees, then the Local Authority will have every right to make a claim on the asset. I am genuinely surprised that the solicitor has made those comments

http://www.fundingcare.org.uk/estatepreservation/estatepreservation.html