Pitfalls of buying property from parents with siblings

SuzieSue

Your F and MIL also need to be aware that if they don't make wills and one of the dies, the other will only get £125,000 worth of the other person's assets, so depending on how their property is held (ie as joint tenants or tenants in common) then they may well lose their home.

Also, if they don't make will, their heirs will have to pay much more inheritance tax than necessary.

JQ.

If they do decide to go ahead with the project, you absolutely have to get a TV Company to do a documentary of the whole process. I believe it would make fantastic TV and could be the next Gypsy Weddings.

Seriously, it's got disaster written all over it.

BitterAndTwisted

Amateurs with little or no access to investment funds cannot make good property developers. This is a scenario with huge potential to destroy your parents-in-law's financial security and every single person's relationship with each other. Nothing good can come of this, I am certain.

I think your in-laws should very seriously consider selling the property as-is. At the very least they should get some agents round to value it once it's been given a fresh coat of paint. Once they have a clear idea of what they could sell it for their other possible plans might be realisable without putting it all into jeopardy.

The very first thing they should do, before anything else, is to sit down and discuss when they are going to make their wills.

Jenniefour

So many contradictions in what the possible aims might be - getting inheritance early, provide something for the children and so on - at the same time there might not be enough money anyway for what FIL wants to do in any event. There are a lot of folks involved here with possibly very different agenda's. A recipe for disaster indeed. And possibly for some people kissing goodbye to their hard earned money.

Some very good advice from other posters on aspects of this - deprivation of assets, loss of benefits for some, whether the project would actually earn any money or be a money pit, money needed upfront but not everyone able to make a contribution.

There needs to be some extremely commited and serious reality checking on all of this, and for the aims to be clear (at present a mish mash of individual agenda's, some of which are competing with each other) indeed. Meantime keep hold of your money. You could try showing you OH this thread - might give him pause for thought.

And legal advice is definitely needed here - father in law going to live in another country, for instance, which might have very different inheritance laws. For starters.

RAS

pozalina wrote: »

3. Planning laws have not been considered yet, that is what they want the initial cash from us all for. The property next door was converted into 3 flats (don't know if that's relevant).

Hi

In which case they are being really stupid. Get hold of the planning applications for next door and use those as a basis for discussions with the planners.

I got outline planning permission for 2 properties for £235 plus £17.50 for photocopies. I traced the plans for the properties nearby and made my own plans by making a mirror image.

A previous failed attempt cost £3000.

Errata

9 siblings + 9 partners + 2 parents = 20 chances of things going wrong, and ?? chances of things going right = chaotic disaster.

pozalina

Thanks to everyone. Thankfully, my oh is clear we will not be putting any money into this project, either as cash upfront or by getting a loan. What I am hoping (and he now realises is likely) is that, when everyone has been to see their bank manager, they will discover there is enough potential to buy no more than a few tins of paint. At that point I am hopeful my FIL will put one of his properties on the market and move towards getting the retirement home he wants. Maybe he will even tell his offspring to get off their backsides and create their own future instead of looking to him for it!

Thanks to Jowo for some good pointers. No-one seemed aware of the impliations of notional capital, they now are. It was good to hear about your experience in this area as oh seems to think there is a fortune to be made (divided by 11!). Yes, two or three people are on benefits, including JSA, DLA and tax credits. Unfortunately the same people are not those who would necessarily see a problem in failing to declare assets on forms.

Parents in law intend to make wills but haven't got round to it... I will raise this as an urgent issue and quote the implications of either dying intestate. In addition, MIL is not on the deeds of either property (not sure what this may mean?).

Yes, my oh is naive in thinking that his family members will not all fall out over this kind of project. I guess his desire for it to work is blinding him to the realities of the situation. I am using the dripping tap effect which usually works in the end

Thanks again, I feel a lot more confident in my concerns and resolute in refusal to part with a penny.

tanith

pozalina that 'dripping tap' effect works wonderfully well with most males I've found :rotfl: give us an update in the future sometime be nice to know how it pans out...

Mojisola

pozalina wrote: »

Parents in law intend to make wills but haven't got round to it... I will raise this as an urgent issue and quote the implications of either dying intestate. In addition, MIL is not on the deeds of either property (not sure what this may mean?).

Your MIL really needs to get herself protected by making sure they both have wills or by getting the ownership of the properties changed.

At the moment, if FIL died, MIL would be entitled to inherit his personal possessions and 250,000GBP. Half of the remainder would go straight to the children and the other half would be put into a trust from which she could receive interest but wouldn't be allowed to touch the capital. See https://www.youngandpearce.co.uk/intestrules.htm

She may have to sell the house in order to give the children their share.

Making a will is much easier!

SuzieSue

pozalina wrote: »

Parents in law intend to make wills but haven't got round to it... I will raise this as an urgent issue and quote the implications of either dying intestate. In addition, MIL is not on the deeds of either property (not sure what this may mean?).

It means that she needs to ensure that your FIL makes a will tomorrow because if he dies, she will only get £125,000. The remainder of his estate will be split between the siblings and so she will be at their mercy. If she falls out with any of them or if any of them get divorced or are declared bankrupt, she could lose her house.