Selling a house with a clause to family?

MK55

Hello,

Some advice if possible please, basics;

Sister and I own a house which my mum & step dad lives in along with my Gran(extension was built in 2009 for my gran, contains a kitchen/front room and 1 bedroom with 2 bathrooms.

Mum & Step Dad want to now pay the remaining mortgage off, can we sell with a condition of the house cannot be sold until my Gran has passed?

I can't see them ever doing this, but after some horror stories on here I just think it would make things simpler should anything happen. As part of it they would like the deeds of the property.

Thanks,

MK

sandsni

If you and your sister own the house then only you and your sister can sell the house. Your mum and step dad can't sell a house they don't own, even if they give you the money to pay off the mortgage on the house. So if you want your Gran to "have her day" in the house (i.e. don't want to sell until she's passed), then don't sell until then.

MK55

Sorry I meant to mention, as part of it they would like the deeds of the property.

00ec25

by the sound of it neither you or sis live in the house so when you transfer legal ownership to your parents both you and sis will crystallise any capital gains tax liability you have since you became its owners as you are now disposing of your investment property.

So have you added the money to pay the tax bill into however much you are charging your parents?

you can write any clause you want into the contract with your parents when they buy it from you but it would not prevent its sale. However, it would instead make a purchaser's solicitor take notice of the condition and make sure his clients were getting clean title to the property so the sale would not complete without you being happy and removing your covenant.

sandsni

So, in effect, you're selling your house to your mum and step dad for the price of the outstanding mortgage? I think it would be possible for a solicitor to draw up something to state your Gran must "have her day" in the house, assuming your mum and step-dad agree and sign it, but I don't know the legalities of the process.


Sounds like it could be a complicated situation to me. Why would your mum and step-dad be so keen on getting the deeds of the house? Have you and your sister not been good landlords ;-)? Do you suspect they are keen to sell at the first opportunity? Also, what happens if your Gran gets to the stage where she needs 24-hour care? Would your parents be allowed to sell up if your Gran had to go into a nursing home? And would it cause issues if you felt they were exaggerating your Gran's condition in order to get her out so they could sell? Hopefully someone more knowledgeable than me will be along shortly with more helpful advice for your situation.

mrginge

Whats the value of the house and the o/s mortgage?

moneyistooshorttomention

Well there are a few people around who manage to sell a house, whilst inserting a clause into the agreement that they get a proportion of any money made by a subsequent owner selling the land for development. I think that is a blimmin' cheek and example of trying to have cake and eat it...but it happens.

This being the case...I can't see why a "special" clause cant be written into things if you decide to sell your house to your parents.

Wouldn't it be easier to wait to sell the house until your gran dies or do you have to sell now (ie because you need the money)?

bouicca21

CGT already mentioned. Depending on the value of the house then there is stamp duty. House becomes part of mum and step dad's estate so possible liability for inheritance tax when they pass away plus liability for nursing home fees when they are older.

As also mentioned you need to factor In The possibility that gran may need full time care at some point in the future.

Presumably mum and step dad want some kind of security? They are probably equally aware of family disputes in which children have put parents on the street. Or on the other hand do they have secret plans to dump gran and retire to Spain?

Did they contribute any capital to the house? Are they effectively paying the mortgage?

There is an awkward mix of money and family dynamics here. I doubt there is a solution that would satisfy all.

MK55

Hi , the house is worth about £170k mortgage left £84k my mum has always paid the mortgage we never had to put too.

We got it in our name as mum was unable to obtain mortgage. We are more than happy to sell it to her, I can't see any reason why it would be an issue. I think it would just give peace to my gran knowing it wouldn't be sold in case of divorce or anything like that. I think best case would be for us to see a solicitor thanks so much for your help all xx

chanz4

Really then if you like your family, you have no choice

Kynthia

If you have paid nothing towards this property and the agreement was always to transfer it to your mum's name once she had paid of the mortgage you got for her, then it's a bit dishonest to start putting clauses in now.