Problems buying retirement flat for an elderly parent...

Wanna_2

We want to buy our mother a specific warden controlled retirement flat, the company that maintain the flats have a rule stating that you must be 55 or over to own it - no problem, the difficulty we have is that the resident of the flat MUST BE THE OWNER of the property.

Therefore we are told that the only way around this problem is to GIVE her the money to buy the flat. Surprise, surprise... if in later years she needed to go into a government run home, social services would put a charge against the property as her own and our money (our pension I might add) would be lost.

We are trying so hard to do the right thing for an elderly lady in order for her to maintain her independance, have company, a safe and secure environment and a good quality of life for her final years yet we're between a rock and a hard place at the moment!!

The only thing we can think of is if there was a way that we could legally LEND her the money to purchase the property...

Any ideas on how we can get around this sticky problem would be much appreciated!!

mjdh1957

I suspect there may be a way to do this using a trust, so it's held on trust for you. But I would definitely advise getting proper legal advice on this, the potential for problems is vey great and you need to be aware of all of them before committing yourselves.

Good luck! It sounds like you have your mothers best interests at heart.

MJMum

The only thing we can think of is if there was a way that we could legally LEND her the money to purchase the property...

I think that you have answered your own dilema there.

My parents "own" a property in Sweden. Only, they don't. The person that lives there (long story, but she's a friend) "owns" it, because there's loads of red tape for foreigners to buy a place over there. Basically, they had an agreement drawn up, in legalise, that they had "loaned" the resident the money to buy the place, and she has the right not to repay that money until she dies (ie she can live there until she dies) but the loan becomes repayable when she dies, and is secured on the property, therefore it must be sold to repay the loan then. The "interest" on the loan is the increase in equity on the property.

Or at least, I *think* that's the gist of it! It was all sorted out by a solicitor, who had seen it all before, so I'm sure that there will be a solution for you too. How nice that you want to help your mother like this.

Debt_Free_Chick

I would have thought that YOU could place a charge over the property. Yours would be the first charge and it would, therefore, take priority over any subsequent charge placed by the local authority.

However - as others have suggested - get a legal agreement drawn up so the LA don't think that this is simply a scam to avoid them taking the house for care fees.

Wanna_2

Apparently... we can set up a private mortgage on the flat and therefore having the first charge on the property although the deeds would be in her name as required OR we can set up a Declaration of Trust so thanks for your feedback and good luck to anyone else out there in a similar position.

MJMum

Glad that you have found a solution. :j


Hey, you'll have just cheered up all the solicitors reading They have their uses :beer: