Helping my Brother to purchase Right to Buy Flat

RinkyTinks_2

Hello everyone, I have recently had my house valued prior to selling and was amazed when it valued up 40k more than I thought it would. This is fantastic, but as my Brother has helped me out so much in the last few years, I would now like to help him in return.

My Brother has lived in his council flat since 1985 and due to severe illness he will never work again. He is entitled to participate in the RTB scheme and he has told us that he would like to purchase the flat and eventually go travelling whilst renting the flat back to social housing. His local council have a scheme where they rent back purchased RTB properties as part of their social housing stock.

I cannot emphasise enough that we have no intention of either making money out of this venture, we have no intention of ownership and that we would be simply giving him the funds (circa 10k) as a gesture of our thanks and appreciation for everything he has done for us.

Can anyone foresee any problems (legal, financial, tax etc.,) with us giving him the 10k?

Many thanks.

RinkyTinks

kingstreet

Is that the whole discounted purchase price, £10k?

If it is, there's no problem.

However, I suggest he carefully considers his position.

He will become responsible for the maintenance of the property, which will include being billed for his share of any work the council does on the structure. This can be like handing over a large blank cheque.

In addition, he needs to check how his benefits might be affected if he becomes a homeowner.

Otherwise, I can't see any other issues.

Mojisola

RinkyTinks wrote: »

My Brother has lived in his council flat since 1985 and due to severe illness he will never work again.

he would like to purchase the flat and eventually go travelling whilst renting the flat back to social housing.

If he's capable of going travelling, he may find he loses his health benefits.

RinkyTinks_2

Thank you so much for responding. Yes, the purchase price would be £10k exclusive of his fees. His is the only flat in the block of 25 which has not exercised his RTB, which we are hoping means that the maintenance charges are quite low.

I will approach him only when I have secured a buyer for my property, I don't want him getting stressed if it takes ages to sell mine.

Once again, thank you very much for responding.

RinkyTinks

kingstreet

It might be worth establishing if the freeholder, presumably the council, has any plans for large-scale repairs or improvements. Even though the block may be completely privately owned, the flat owners still have a lease and it is this which will determine the freeholder's rights and responsibilities and how costs are shared.

By submitting an RTB1, he is not committed. When the council issues the S125 notice, which confirms all the details, he will have 12 months to complete the purchase.

RinkyTinks_2

This is very true! I know nothing about his benefits, but I am sure he has looked at that side of things. I don't think he would be travelling overseas due to his health. He has a motorhome and he likes to travel around the UK, sorry I should have been a bit clearer about that.

RinkyTinks

Mojisola

RinkyTinks wrote: »

Thank you so much for responding. Yes, the purchase price would be £10k exclusive of his fees. His is the only flat in the block of 25 which has not exercised his RTB, which we are hoping means that the maintenance charges are quite low.

Do all the sums using various scenarios to make sure you don't leave him in a less secure financial situation than he is now.

While the idea of owning your home sounds good, if he currently has everything paid for him by benefits, it may be better to put some money aside for him and finance his travelling.

RinkyTinks_2

Mojisola wrote: »

Do all the sums using various scenarios to make sure you don't leave him in a less secure financial situation than he is now.

While the idea of owning your home sounds good, if he currently has everything paid for him by benefits, it may be better to put some money aside for him and finance his travelling.

That is a very valid point, thank you.

RinkyTinks