Help what do we do next,unable to get to our money can we claim?

katiejohn

I have another thread on here about my Parents selling their house to my brother and help him by leaving £50,00 in it so he could afford it. Its long story and as i have already posted it on the forum I'll cut to the chase. My brother bought the house for £150,000,my parents left £50,000 in he put down a deposit and had a £85,000 mortgage,this was all done legal with their name on the deeds the idea was to get the money when my father retires that was 8 years ago. My brother has re mortgage already and the house price has dropped. My brother has tried to re mortgage again to get my parents money out but due to his income he is unable to,therefore my parents r left without there money PLEASE can anyone tell me if they r able to claim any kind of benefits????? They have name on deeds but unable to get money from it so they have nothing. Am trying very hard to help them as they have worked all their life and gave myself and brothers a wonderful childhood. Thank u so much for taking the time to read my thread.

sparky260500

katiejohn wrote: »

I have another thread on here about my Parents selling their house to my brother and help him by leaving £50,00 in it so he could afford it. Its long story and as i have already posted it on the forum I'll cut to the chase. My brother bought the house for £150,000,my parents left £50,000 in he put down a deposit and had a £85,000 mortgage,this was all done legal with their name on the deeds the idea was to get the money when my father retires that was 8 years ago. My brother has re mortgage already and the house price has dropped. My brother has tried to re mortgage again to get my parents money out but due to his income he is unable to,therefore my parents r left without there money PLEASE can anyone tell me if they r able to claim any kind of benefits????? They have name on deeds but unable to get money from it so they have nothing. Am trying very hard to help them as they have worked all their life and gave myself and brothers a wonderful childhood. Thank u so much for taking the time to read my thread.

What was the reason your parents sold it to him in the first place.

rogerblack

Do I understand this right:
Your parents gave your brother 50K 8 years ago, in the expectation that this money would be repaid when they retired.

During this period, your brother has not paid enough of the house off that the bank is comfortable with increasing the mortgage by 50K to repay the money?

Below is my understanding, you should probably seek professional advice, or maybe others can clarify my misunderstanding.
This is problematic.
They own a share in a house worth (say) 40K.
As they have the rights to force a sale - as their names are on the deeds - they may be treated as if they have 35K (say) of capital - as that's what might be recovered on a forced sale after court costs.

http://www.dwp.gov.uk/docs/dmgch52.pdf 52433.
To quote from the underlying ESA legislation, property is exempt from consideration as capital when
"a partner or relative of a single claimant or any member of the family as the home where that person is aged 60 or over or is incapacitated"

Assuming your brother is neither over 60, or incapacitated, that means only the first half applies.
"A partner or relative of a single claimant".
This seems to be very clear, that if they are a couple, then no relatives staying in the property can mean that the property is exempt from being considered as capital.

The question then arises, can your parents legally evict your brother, if this is the case, then they may be treated as having the capital - as mentioned above.
This would entirely bar them from any means-tested benefits.
As, indeed, would the house being sold, and them getting this capital.

xylophone

Are you certain that your parents' names are indeed still on the deeds? Check with the Land Registry.
http://www.landregistry.gov.uk/www/wps/portal/!ut/p/b1/04_Sj9CPykssy0xPLMnMz0vMAfGjzOKNjSxMDA1NjDwsjM3MDTxN3dyNDUNMjQ1MjPWDU_P0C7IdFQG9k5Tz/

You will see that you can download a copy of the title register for four pounds. (Example here- Look at all pages of this - you will see it gives information about ownership and restrictions etc.).http://www.landregistry.gov.uk/www/wps/QDMPS-Portlet/resources/example_register.pdf

skintandscared_2

I, too, would check your parents are still on the deeds. I'm not sure how your brother would have obtained an 85% mortgage on a property he doesn't officially own?

agrinnall

skintandscared wrote: »

I, too, would check your parents are still on the deeds. I'm not sure how your brother would have obtained an 85% mortgage on a property he doesn't officially own?

The mortgage was 85% of the part that the brother was paying for, but only 57% of the value of the property. I'm guessing the lender would have had a charge on the whole property, including the share paid for by the parents, so would have been comfortable about getting their money back if they had to foreclose.

xylophone

I have looked at both of the OP's threads and it is not entirely clear what exactly has happened.

What seems to have happened (as far as I can make out) is that originally (eight years ago?) the OP's brother purchased a house that belonged to his parents? (I assume the parents moved elsewhere.) The house was valued at £150,000. The brother put up £15,000, the parents "left £50,000 in the property" and a mortgage was obtained for £85,000. At this point all the parties were named on the deeds, I assume as tenants-in-common, with the parents owning a sixth each and the brother owning two thirds. It is not clear how the lender regarded the money "left in" by the parents. It does appear though that as far as the parents were concerned, when they came to retire, the brother would re-mortgage and buy them out.

At some point within the last few years, the brother got the father/ mother/ both to "sign something" (still not clear exactly what) on the basis that "a better deal was available" and borrowed an additional £30,000 against the house (either new or additional mortgage).It is not clear what he did with the money - at all events he didn't use it to part buy out his parents' interest.

The parents would now like their £50,000 back but the brother does not earn enough to re-mortgage/obtain an additional advance.

We don't know what the parents signed - if it was some document which took them off the mortgage in consideration of a Deed of Trust which gave them only the right to £50,000 or possibly a third of the proceeds on sale of the house, then they would be unable to force a sale?
If they are still on the deeds (but with a reduced interest?) they would need to go to court to enforce a sale? It is difficult to imagine that they would do this as it appears that apart from their son and daughter-in-law, their grandchildren also live in the house?