Sell and Rent Back Problem!

Treeen

Hi All

I'm asking for advice on behalf of my mother. When my stepdad was diagnosed as terminally ill.. he decided (lord knows why) to sell their house to one of those companies who then let you rent it.
The house value at the time (3 years ago) was £120,000.. he sold it to the company for £90,000. They recieved £75,000 and the other £15,000 was to come whenever they vacated the property.
My stepdad died shortly afterwards and my Mother has been living there since, paying a monthly rent.
My mother is disabled and has recently moved to an adapted bungalow. The company who own the house have since re-let it.
My Mother sent several emails regarding the £15,000 (she's spent a huge chunk of the initial payment on renovations to the bungalow).. She finally heard from them this week and they are saying that because of the housing market being like it is.. it wouldn't be viable for them to sell the house to regain the initial cost to them and she will have to wait until such times as it is before getting the money.

I know that the houses in that area (same area as I live in) are still fetching £120,000 and over, so there's no way they wont get their initial costs back if they put it on the market now. Instead they are keeping that money as well as getting a nice rental income from the new tenants each month.

My mother wasn't told that could happen

Where does she stand.. should she seek advice?. The guy from the comapany said if she wasn't happy with it he would set up a meeting with her ... Yeah I bet he would, hoping he could confuse a pensioner even more. I have told her that I would ask about and then we could set up a meeting where I would be in attendance.
I just need to get some info beforehand.

Thanks for reading.

Treeen.

dimbo61

What does it say in the contract that your stepdad and mum signed!
Maybe time to take all the paperwork to a solictor who deals in property

jamie11

Treeen wrote: »

Where does she stand.. should she seek advice?.

Yes definitely, but not from a public forum. Your Mum needs to have a very good solicitor well versed in housing law to take up the cudgel on her behalf, I mean it, well versed in housing law.

These sharks doing the buy and rentback schemes are very knowledgeable themselves, you need someone better. If you can't find one locally try Richard Webster, a poster on this forum, he does know his stuff.

Treeen

Thank you both so much for your replies.

Dimbo61.. I haven't seen the contract yet... she just brought the letter round with her. Her late husband done all the paperwork although she was in attendence and nothing like that was said at the time.. But as I said to her.. I'm sure it's tucked away in the small print somewhere. I detest people who take advantage of the elderly...(well anyone ) as well as my mum being disabled and my step dad being terminally ill at the time (

Thank you Jamie11.. That was the first thing myself and my partner said to her.. I thought I would just post on here to see if anyone else had been in the same situation.. what they done about it.. and what the outcome was.

Thanks again.

clutton_2

you need to look in the contract... see if you can find the clause about "disposal" of the property ... The law surrounding Sale And Rent Backs was draconionally scrutinished by the FSA last year, and the practice has pretty well been stopped now - which is a shame as it helped many people out of financial disastrous situations.

When did this transaction take place ?

Treeen

Hi Clutton
The contract took place in November 2008.

I have asked my mum to bring the contract round with her tomorrow so I can have a look at the small print.

Treen

Treeen

Could someone tell me what "Paid Link" means?

On the completion statement it sales the sale price was £125,000 ..Less Paid Link...£50,000.. balance due £75,000.
They recieved the £75,000 with a further £15,000 "locked-in" to the value of the property.

So on reading that, then they are correct in keeping the £15,000 if they feel they cannot get the sale price for the house. But they didn't buy it for £125,000.. that was the value at the time but they only paid £75,000.

Looing like my mother doesn't really have a leg to stand on here doesn't it and she'll just have to sit bac kand wait until the market picks up. Even though houses in that area are actually going for more than that. What if they decide that they want to carry on renting it out indefinitely instead of selling it?
Biggest mistake her husband made, and non of us know what on earth pocessed him to do it. They had no debts, the mortgage was all paid... crazy!

Treen

Hammyman

Treeen wrote: »

Looing like my mother doesn't really have a leg to stand on here doesn't it and she'll just have to sit bac kand wait until the market picks up. Even though houses in that area are actually going for more than that. What if they decide that they want to carry on renting it out indefinitely instead of selling it?
Biggest mistake her husband made, and non of us know what on earth pocessed him to do it. They had no debts, the mortgage was all paid... crazy!

Treen

Basically they could rent it out indefinitely.

OK, there is a bit of a silver lining in this you can point out to your mum if it is really getting her down.

The mortgage was all paid - they obviously bought the house some time ago. So looking on the bright side it isn't like the £75k they have had is going to be less than they paid for the house. I paid £22k for my first one. It was valued the same as your parents last year. If I'd have been in the same situation, whilst it is damned annoying, I'd be at least comforted by the fact I'd got more than 3 times what it cost me back and I had the 75k in the bank with the possibility that at some point in the future there may be another £15k.

BigAunty

Treeen wrote: »

..

Looing like my mother doesn't really have a leg to stand on here doesn't it and she'll just have to sit bac kand wait until the market picks up.

Get expert legal advice and find out if it is viable for you to prove that the terms have been fulfilled and if it is feasible for you to take them to court to enforce payment.

FireWyrm

Oh I hate these companies. There was a thread on here last night about a petition to regulare PDLs but I think that we should be lobbying to regulate these theiving !!!!!!!s. It's nothing but legalised theft and exploitation of the elderly. I know there is nothing that is likely to be done to shut these shysters down, but by god, if I could wave a magic wand....

OP, you need professional advice. Take the advice of the others and see a solicitor, now. Your asessment of 'not having a leg to stand on' is useless in the extreme since property law is a major minefield. I suspect you probably do have a leg, pursue the option until you are told otherwise by a qualified expert.