written or verbal agreement ?

andy_johnson

My late mother took a loan from my brother in law in 1990. Iam her son and one of the executors of her will. None of the money was repaid during this period up until this day. Now my brother in law is looking for the loan plus interest. He as said there was a verbal agreement with my late mother, that the loan would be postponed until after her death. It was not agreed that interest would be suspened. I have asked if this agreement is in written form to which he replied no. The loan it self is through a legal charge form which i found with my mothers details. The loan was for £11,000. My mother left the house to me and my neice, who is also an executor of the will. Iam unemployed, my neice works. Can he make us sell the house ? or make my neice take out a second mortgage, with her being the only one working. ?

Bossyboots

I am a bit confused about it being said the loan is not in written form but there is a legal charge in existence. Surely this is the same thing.

Assuming that the debt is agreed, then this is repayable from the estate of your mother which includes the house. If there are no other assets, you and/or your niece will need to raise the money to repay it and if that means selling the house then that is what you will have to do.

silvercar

unless he can produce something showing he is entitled to interest, I don't see how he can now claim it.

Astaroth

I think that there has to be some element of pragmatism taken when it comes to family and loans. Ultimately a death of a parent is going to affect different people different and he will always remain your brother.

Verbal and written contracts are equally binding legally however it is clearly much more difficult for someone to prove the exact terms agreed in a verbal contract.

The main question as ever comes down to is it more important for you to keep your brother or to deny him a bit of cash?

Bossyboots

He says brother in law in the opening post, so presumably his sister's husband. Still very unpleasant though if they fall out over this.

It seems that it would be impossible to prove a verbal contract when one party is deceased, unless there is someone independent who witnessed it.

The fact remains though that there does appear to be written evidence on the loan and that at least is repayable from the mother's estate. From the wording of the opening post, the OP also seems to accept that interest was expected to be paid.

Astaroth

Sorry, combination of dyslexia and scan reading really doesnt help

Even if it is an in law it does mean it is the brother of someone very close to you and still a relationship which could be very easily soured by fighting over money.

andy_johnson

Sorry if i confused you. The legal charge loan form i have a copy of, so yes, i know i have to pay the loan back but the interest from 1990 to 2006. Do i need to repay this even though its not written agreement.

billywhizz

It seems your mother took the loan in the knowledge that this would be repaid upon her demise. Seeing as how the loan was apparently given in 1990 then it would seem fair to pay interest on this sum yes.

However, if there is nothing written down to say you have to then I cannot see any way anybody could enforce that, it all depends on how much of a row this is going to develop into within the family I guess?

Bossyboots

I would say that no interest is payable on this loan as the loan itself is in writing. There is an agreement concerning the loan that does not stipulate interest. I think BIL would be hard pushed to convince a court that there was an agreement to repay with interest when he didn't have it incorporated into the legal charge. He did however presumably get your mum out of a financial difficulty by loaning the money on which he will have lost interest over the last 10 years so it would seem fair to add on a sum for interest, if nothing else then as a thank you for helping out.

silvercar

being the original loan was secured by a property charge, I would have thought this would have stated that interest would have been due, if it was the initial intention.

silvercar

One more thought: the loan is a charge on the property so needs to be repaid when the house is sold. Does that mean there is a requirement to sell the house now? or does your BIL have to wait until whoever inherits the house decides to sell it?

Reading the OP comments again, I'm not convinced that the BIL can force a sale, merely that he would be entitled to the money when the property is sold - as is normal with charges on property.