Tenants in Common & Title restriction @ LR

spectre

Hello I posted , this on the house buying forum and was advised that this may be a better place to post , Anyway here is the original link and original post , hope some one can help

thank

https://forums.moneysavingexpert.com/discussion/comment/61892999#Comment_61892999

Good evening all, I Was wondering if anyone knew how the following could have occurred ?

background info first.
A mortgage free property owned by person A & person B as tenants in common , a form A restriction had been placed on the title deeds to reflect a Trust deed arrangement for the splitting of the estate 50 / 50 between A & B`s children upon death of the other or if the surviving person deemed it necessary they could use the NET sale proceeds towards a new property and then a similar restriction placed on the newly purchased property. to reflect persons A wishes under the original trust deed.

person A passed away about 5 years ago and person B continued to live in the property until about 1 year ago until person B decided to up sticks / sell / remarry & buy a new property jointly with there new spouse.

The title deed had the restriction (form A) under the proprietorship register section
The trust deed existed and was written as per my description above (50/50 split or NET proceeds toward a new property + new restriction) etc.

However the property was sold and there had been no split or no restriction logged against the new property for person A`s children as laid down in the original trust deed.

SO how could this have been allowed to have happened any ideas ?
thank you

observations_from_a_hill

Well, the mechanics are pretty simple. With a trust involved, two or more trustees are needed to sell the property. Person B as surviving trustee would have had to appoint someone else (person C) as new trustee so they could both "sign off" (by giving a legally valid receipt) on the sale. This is a provision which essentially protects the purchaser, since the trust is removed from the property (so there will be no claim for the house itself). The terms of the trust attach instead to the proceeds of sale.

So there would have been a breach of trust if the sale proceeds had been applied fully to the new purchase without a similar trust being declared. Do you know if this is the case? Depending on your own standing here (i.e. are you a beneficiary?) some mild and polite questions to person B would be a good start.

Edit: I've assumed the trust deed is worded in accordance with your interpretation. This is something on which you can easily obtain your own legal advice. Whether or not the trust deed is effective, perhaps person B is a simple soul who assumes the trust attaches automatically if the sale proceeds have indeed been invested in the new home. So, check if the trust still stands, then be nice to person B so the matter can get sorted amicably.

spectre

observations_from_a_hill wrote: »

Well, the mechanics are pretty simple. With a trust involved, two or more trustees are needed to sell the property. Person B as surviving trustee would have had to appoint someone else (person C) as new trustee so they could both "sign off" (by giving a legally valid receipt) on the sale. This is a provision which essentially protects the purchaser, since the trust is removed from the property (so there will be no claim for the house itself). The terms of the trust attach instead to the proceeds of sale.

So there would have been a breach of trust if the sale proceeds had been applied fully to the new purchase without a similar trust being declared. Do you know if this is the case? Depending on your own standing here (i.e. are you a beneficiary?) some mild and polite questions to person B would be a good start.

Edit: I've assumed the trust deed is worded in accordance with your interpretation. This is something on which you can easily obtain your own legal advice. Whether or not the trust deed is effective, perhaps person B is a simple soul who assumes the trust attaches automatically if the sale proceeds have indeed been invested in the new home. So, check if the trust still stands, then be nice to person B so the matter can get sorted amicably.

Thank you for the informed reply ,
I can tell you the original trust details have been validated & confirmed by an independent solicitor as per my description who was acting for the deceased person A & actually drew up the trust deed itself (in writing to me).

Initial conversations with Person B have indicated that a new trust has not been declared on the new property with an interest logged to myself (as a beneficiary). But the proceeds have been invested towards the newly purchased property along with the new spouse of person B.

Person C as you mention who receives the trust along with person B , can this be anyone of persons B choice ?
What obligation or any legal responsibility do they have to serve if any towards the trust they are receiving the money against ?
Can i ask what does the breach of trust mean ?
Can it be upheld or is all this now down to amicable conversations with person B?
Regards

observations_from_a_hill

Person C could be anyone person B chose. They are then joint trustees of the trust and are legally required to apply the sale proceeds in accordance with the terms of the trust. If they don't, they are in breach of trust. This is a civil matter, not a criminal one, and your claim would be against B and C to repair the breach.

I don't know at what stage the Land Registry would reveal the identity of C, but our excellent Land Registry Representative may well visit to give details of any necessary procedures.

Please remember that going to court over this is a bit double-edged. The court can consider the intentions of A and B when they signed the deed of trust, and person B is there to speak for themselves. It seems the present circumstances were just not considered, and if B said "Well, I never thought it meant that, and I certainly wouldn't have signed it if I'd known" there's possibly the start of trouble.

If I were B, I'd be arguing that the Housing Act gave me the right to buy, not the right to acquire a life interest, so the trust deed is incompatible with the original purchase.

Best for all concerned to continue low-key at the moment, but obviously you will have to take account of the rights of B's new spouse somewhere in the mix.

John_Pierpoint

Would it not have made far more sense if the executor of A's will had become one of the trustees when A died?
If A's children were over 18, that executor could have been one of A's children.

ValHaller

observations_from_a_hill wrote: »

Best for all concerned to continue low-key at the moment, but obviously you will have to take account of the rights of B's new spouse somewhere in the mix.

B dies. B's spouse has to accept disposal of the house to discharge the trust obligations to A's children. B's spouse gets the rest of the value ????

B's spouse has been put in a vulnerable position by this arrangement, made worse by B proceeding in neglect of the trust. I don't see that B's spouse has any claim over assets from the original property.

observations_from_a_hill

Greetings to Valhalla,

Ultimately OP has to seek an equitable remedy. This would take account of "innocent" victims like B's new spouse.

spectre

thanks for all your replies your advice so far has already given me some direction and information I was not aware off , Will update the post once I have perused these avenues

spectre

An update on the facts obtained so far not sure as to what these mean maybe someone can confirm...

Person A (deceased) & person B`s Will & joint Trust details exist at a solicitor A&B shared they have been personally read to the effect that the trust would split 50/50 of the property proceeds upon sale.
Person A is deceased so B appointed C to act in place of A.

SO person B & (person C who acted in place of the deceased A) to receive the sale proceeds (to give a good receipt) as detailed in the copy of the TR1 we obtained from the land registry.

The prospective purchaser (new owner) of (person A& B`s) property actually used the same solicitor as used by person A&B to draw up the will & trust arrangements which person B & C appear to have neglected or (breached).

There is actually a line in the TR1 form section 11, which states the Transferor (B&C) is entitled to all the beneficial interest & not encumbered his individual share. Which is against the Trust wording

What to do ? any clues

John_Pierpoint

Can you put £ numbers on the value of the sold property originally owned by A & B and the value of the replacement property ? ie have trust funds been siphoned off or simply re-invested ? [On the face of it the trust has been given to BNP (B's New Partner]

Assuming that B has not been personally enriched from trust funds, perhaps because the new partnership live in a property where BNP has put in half the capital of a property worth twice the original, then B&C can simply say that there has been something of a delay and they were just about to get a round tuit and register the property to indicate that a trust owned half of it.

[I had a similar situation where my mother ended up having an interest in possession in the family home - as a widow, rattling about in a 4 bed home, she was continually getting various chancers (including the local estate agents) pestering her to sell. It used to annoy me, as all they needed to do was invest the modest (now £3) at the Land Registry to discover she could not, on her own, agree to sell].

If you don't have a "working relationship" with B or C, then I think you need an experienced lawyer to advise you on the best tactics to deal with this human dilemma,
What you don't need is a lesson on the law from a young graduate without streetwise practical experience.

Someone needs to find out if BNP is as thick as thieves with B or misguidedly thinks they have been invited on a free ticket to join into 100% of a valuable household.

Pertinent facts are the £ valuations of the two properties (see something like Zoopla) and the ages of B & BNP.

spectre

Hello John , I do have some kind of relationship with B , And we are on speaking terms, Now that we have discovered the property which A&B owned has been sold (1year ago) B has indicated that there is no NEW trust registered in person A interest on there newly purchased property.

It appears C simply accepted 50% of the sale as a close relative of B & newly appointed trust member in place of the deceased person A and siphoned back to B who now has 100% of the sale proceeds.

B`s purchased a new property what seems 1/2 along with there new spouse FYI it is worth more than (A&B) property that was sold.

B wants to settle in cash what should have been the 50% but is only offering 25% at this stage (I assume because the other is re-invested in the newly purchased property)