Equity Release

Lizard_49

Hi.

I have a friend who is at her wits end and is actually becoming ill due to a major issue she has with Equity Release.
Her parents released £26,000 of equity in their property some years ago. They were paying back some £200 per calendar month in interest charges.
Both parents are now deceased and the Equity Release company are stating to my friend that she, as the daughter of the deceased, is personally liable and owes them £145,000. My friend had no financial interest in the house and signed no documentation when the plan was taken out. The company have told her that she has to sell the house herself. She is finding it difficult to sell the house and has only had offers in the region of £80K to £90k. She has sought legal advice and been told that she is liable for any shortfall. I am sure that this cannot be correct and I would be grateful for any advice so that, even if I can't put her mind at rest, at least she will know where she stands.

Thanks.

housebuyer_abc

If she didn't sign anything then she can't be responsible. However the parents estate is repsonsible so it looks like there will be no money left in that for her to inherit

Lizard_49

Many thanks for the good advice. Any others have any thoughts?

getmore4less

Who administred the estate, they should have sorted this out.

TonyMMM

Who was executor of the parent's wills ? If they didn't discharge their duties properly they could be held liable ...but basically as housebuyer_abc says , the house and its equity release contract (which is really just a mortgage) are part of the estate.

Someone needs to look closely at the Equity release contract that was signed and see what it specified would happen on the deaths ...was the house, whatever its value, to be handed over to the company, or just the outstanding capital + interest ? It may be that the house isn't hers to sell anyway...

Lizard_49

I believe that she is the only child in the family and there was not a will. Salutory lesson there! I am unsure if she has access to a copy of the original agreement so I guess I probably need to go back to her and get some more info.

Thanks for all the advice so far. When I know more I will let you know how she gets on.

Cheers all.

DVardysShadow

It looks to me like the parents took the £26000 and did not pay the interest, hence they now want £145,000. If she is being threatened with personal liability, she should just look at whether there is any value left for her in the estate.

If there is value left in the estate, she should cooperate, but otherwise, I would suggest she just leaves the lender to sort out the mess on their own. There is no way she owes any money. But being a bit cynical, I suspect that the lender are blowing up the fears to pitch the possibility of her taking out a loan to pay off the parents' arrears. She MUST NOT do this. The lender can stew in its own losses, your friend can walk away. If they pressurise her, come back for more advice.

TonyMMM

Lizard_49 wrote: »

I believe that she is the only child in the family and there was not a will.
Cheers all.

If there was no will, someone must have still dealt with the estate .. including arranging for the transfer of any property (and settling debts). Did she do this herself ?