Buying family members council house

bjor1978

Hi,

My elderly great-aunt is a council tenant, I am interested in the possibility of exercising the right to buy and owning her house myself, effectively having her as a tenant.

Anybody any ideas on where to start with this ? I really have no idea where to begin.

Many thanks
Brendan

Bossyboots

Only your great aunt can exercise the right to buy and if she was to do this and subsequently transfer the property to your name she would have to repay the discount unless she waited until the repayment period was up, but of course she might not be around to do it then.

You could loan her the money to buy the property and have a Deed of Trust drawn up recognising your contribution and/or she could leave it to you in a will. Wills of course can be changed though so this does not offer you a guarantee of protecting your money.

bjor1978

Bossyboots wrote:

Only your great aunt can exercise the right to buy and if she was to do this and subsequently transfer the property to your name she would have to repay the discount unless she waited until the repayment period was up, but of course she might not be around to do it then.

You could loan her the money to buy the property and have a Deed of Trust drawn up recognising your contribution and/or she could leave it to you in a will. Wills of course can be changed though so this does not offer you a guarantee of protecting your money.

Thanks for the info, a couple of questions:

1. What is 'the discount' ? How is this calculated ? and what is the repayment period ?

2. Could she buy it and then sell it to me for the price she bought it ?

bikerqueen

afaik it's a 3 year period she would have to wait after buying it before she could sell you it without repaying the discount.

QuidsInn_2

I have just seen this thread as I am a new council tennant. In my area, you have to be a tennant for 5 years before you get the right to buy, then you have to keep the property in your name for a further 5 years before you can sell, or you have to repay the discount that you received on buying the property. I think it varies from area to area, so best to check with your local council.

This is a fairly new ruling, so if your Gt Aunt has already been in the property for a while, the 3 year rule probably applies.

Hope this helps.

hethmar

Things have changed recently I believe. There used to be a 3 year wait before the owner could sell it and think that may have been lengthened. You could have a solicitor write up a Declaration of Trust in that you pay for it and she can live there without you being able to sell the place from under her but remember you will pay tax when you do sell it and if auntie goes into care in the next few years there may be some question over the property being transferred to avoid care costs.

bjor1978

If I pay for it though (with a Deed of trust) could I get a mortgage to do that ?

fabwitch_2

My brother bought his Step Nans council flat, he got the morgage in both their names but he paid the morgage When hi nan died he was left the flat in her will and sold the flat.

Bossyboots

bjor1978 wrote:

If I pay for it though (with a Deed of trust) could I get a mortgage to do that ?

I think you would have to scout around lenders for the answer to that but I think like the poster above you may need both names on the mortgage to protect the mortgagee but in theory you should be able to sort something out.

You are wise to have the trust document drawn up. Please don't rely on a will to safeguard your interest.

Bossyboots

fabwitch wrote:

My brother bought his Step Nans council flat, he got the morgage in both their names but he paid the morgage When hi nan died he was left the flat in her will and sold the flat.

99 times out of 100 there would be no difficulty with using a will to safeguard the interest in the property but it can so easily be changed that it is a very risky way of handling this type of transaction.

Raggie

my 2p's worth..

Now I am not a legal person, but I have just gone down a route similar to the above..

A Dead of Trust is not watertight.... you can have it written such that you put in X% your aunt puts in Y% (her discount) an upon selling then you both get your investment back.. (best way I am told) etc.. and this is the most common way.. she would also write a will leaving you her share of the house.. sorted right... no..

The problems will start if your aunt needs long term care (nursing home) and lives in England.. where we have to pay.

The local council can insist that her assets are sold to pay for the care.

The problem I have been "told" is that a dead of trust has never been contested in the High Court.. (I found a news report of it going to CC court but the woman died before seeing it through).. and as all law is made from case law.. I could not find a single solicitor who could guarantee that this deed of trust would guarantee me getting any money back... The deed to be contested by the council.. after all it was their property and you were not a tenant, you only loaned the tenant the money to buy..

As such the CC "could" have the DoT overturned..

Problem 2.. does your aunt have any other relatives.. as again I was told you may need their consent in writing before proceeding as in the event of it reaching your aunts death and you being left the property in the will.. a very expensive solicitor told me.. that the will could simply be contested.. as you would have to prove retrospectively there were no coersion (bad spelling I know). on your part to take advantage of the lady and benefit from her RTB and ultimately benefit from her death..

finally.. in my case.. having spent a lot of money paying for the best advice I could get.. I pulled out .. the risk of not getting my money back was to high..

but whatever you decide to do .. good luck..