Advice on eviction

BigAunty

DaftyDuck wrote: »

The parents would actually be better off accepting the s21, as they might be eligible for housing benefit in another property (deprivation aside for the moment), or would be able to use the rent from the property to fund a rental more in fitting with their ability to pay (be paid for).

The parents will have to account for potential deprivation of capital of a substantial sum - up to 100k, is it? Unless, of course, the benefits authorities are happy to accept that it was largely used to pay off debts that were legally due.

It is a complex area and note that it is up to the authorities to identify deliberate and intentional disposal of capital by the claimants in order to be eligible for benefits. Since the parents were debt ridden and potentially going to be homeless, that the OP could not buy it for a higher cost, maybe that would be seen as the primary purpose of the firesale of their property, not benefit entitlement.

OP -why was the HB claim rejected? Deprivation of capital (less likely?), contrived tenancy (more likely?).

See W1.662-W1.679 onwards of this DWP guide for general info. It's the decision makers guide, therefore a staff manual. Good pointers in it for how the OPs parents could be investigated and how they can defend or prepare their defence of any accusation of such or denial of benefits on those grounds. Op should check if there's a more up to date version.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/236960/hbgm-bw1-assessment-of-capital.pdf

https://www.gov.uk/government/publications/housing-benefit-and-council-tax-benefit-guidance-part-b

silvercar

I think the deprivation of capital is a red herring in this case, as there has to be a deliberate and intentional disposal to order to claim benefits. OPs parents didn't think they would ever need to claim HB.

Any claim to HB in the current home risks a claim of contrived tenancy. So a S21 eviction and a move to another property could bring a successful HB claim.

DaftyDuck

BigAunty... it does appear likely the 100000 was used to pay off the debts of 80,000 that started the whole business off. If not...'OMG' ... there's another tranche of money needed to be found.

The above options by Pinkshoes & Silvercar don't, I think, quite do justice to the parents, as there was the 50k used by the op... if the house next door sold for 180000 recently, even with annual rent of 20k (excessive for the house price), there should still be ~80 - 100,000 left to return to the parents. They'd be foolish to consider return of 35 - 50,000 fair, wouldm't they?

nervousandready

wow, thinking of you on this one. A very difficult situation. Can't offer you any practical advice but hope you can get this resolved -

Somerset

I should have read the OP's other posts before posting here. I actually feel sorry for the parent's - none of this their doing.


- The house was valued at 250K when purchased. It was purchased for 100K, 150K or 60% below market value.


- There is a contract ''which states they can live in the house rent free until death''. OP says it was three months later and though signed by all parties has no witnesses.


But given a sale at undervalue of 150K ( 60% ) it's inconceivable there wasn't a trade-off hence the rent free till death.


- The OP has already had one legal opinion that ''he feels any court action would be hopeless due to the fact they only sold the house to us on the proviso they could continue to live there.''


Now given that the OP has granted a lifetime tenancy .... had a legal opinion that this tenancy is legal, what does she do ? Issue a S21 which can not succeed (given the facts ) and then asks if she can get away with it if the judge doesn't find out at the hearing ?


Oh, and the possibly fraudulent behaviour getting the mortgage ie
- residential but might or mightn't live there.
- parents in situ
- very restrictive tenancy agreement due to be signed as a condition of the purchase
- other BTL mortgage later for other property so at least at some later stage OP knows the difference between residential and BTL but doesn't inform the lender of any of this.


OP - sell the house to an investor with the tenancy as is. You might get 60% of it's current market value 60% of 190K => 114K. Your real mortgage is 100K ( not 150K, you kept the 50K for yourself ).


You haven't been hard done to at all.
-

outofmoney

Rocky99 wrote: »

Just checking....
There was no witnesses to our signatures on this contract does this have any bearing?

You could always deny signing it. Though I'd not really recommend that. Or you could try going down the route that you felt forced to agree, since your father was talking of suicide if you didn't come to their aid.

Was he ever on medication for depression? Did he ever see his GP? Would anyone back you up to show how you made the agreement without thinking it through properly.

BigAunty

Somerset wrote: »

I should have read the OP's other posts before posting here. I actually feel sorry for the parent's - none of this their doing.

Who expects their child to gift them a lifetime of free rent? Who makes themselves financially dependent on their child? Who cuts off their grandchildren when their child tells them of financial hardship?

So you feel that the OPs parents didn't contribute to the financial car crash that has resulted by their history of debt and sense of entitlement to a standard of living higher than their daughters and at at the expense of their grandchildren?

The OPs parents weren't negligent in failing to anticipate changes in income that would make servicing the mortgage impossible? They are resistent to other options other than a lifetime of free rent despite the reality of homelessness. They could cancel that agreement and walk away with 30k but choose to be potentially turfed out by bailiffs for zero return.

Both parties were negligent about risk and optimistic about reward. Now they should be pessimistic on both cases. That agreement is worthless because it can't be honoured. Both parties caused this, both parties suffer hardship through lack of planning.

pinkshoes

silvercar wrote: »

Great summary pinkshoes.



1 should be rejected as OP is older and wiser now and should not entertain the idea of guaranteeing parents a home for life in current financial position.

2 works and is a preferable solution. It looks like no CGT would be owed because the property has not gained in value (CGT looks at property value not equity.) Very luckily for OP the lifetime tenancy agreement was signed after the house purchased, so the starting point for CGT would be the then market value, not the market value of the property with 2 not very elderly residents on a free for life deal.

3 is possible but not recommended. the lender would then realise that OP bought on a residential mortgage without living in the property, that she gave a life tenancy without consent and didn't notify lender of situation. In any case repossessions take months building arears and are sold at a cheap price and the lender charges for services, so OP would have little money left if any from the eventual sale. Plus a black mark on credit file for repossession.

So I would choose option 2, but phrase it as all equity after sale costs, so estate agent and legal fees are covered, tell parents you will sign a letter instructing solicitor to pay net proceeds to them.

Hopefully the parents would see sense and choose option 2 too!

Somerset

BigAunty wrote: »

Who expects their child to gift them a lifetime of free rent?


There was and is no gift - it cost 150K


Who makes themselves financially dependent on their child?


Someone who trusts their child not to screw them over once they've got their name on the deeds ?




Who cuts off their grandchildren when their child tells them of financial hardship?


It happen's - friend's fall out over money, so do family's (particularly if they feel ripped off). Maybe they can't communicate with OP or family without constant pressure to do this ... do that ...

So you feel that the OPs parents didn't contribute to the financial car crash that has resulted by their history of debt and sense of entitlement to a standard of living higher than their daughters and at at the expense of their grandchildren?


They contributed by trusting the daughter. Poor judgement but understandable. Their 'entitlement' ? They are entitled to have to have their contract honoured without being hounded and pressurised by a daughter who appears to have no sense of commitments, contracts or promises made. Who, after having been told she has no case, still tries to evict her legally resident parents, in the hope she can pull a fast one and the judge never finds out she's lieing through her teeth.


Maybe the daughter's standard of living should be earned by her and not leached from her parents.

The OPs parents weren't negligent in failing to anticipate changes in income that would make servicing the mortgage impossible?


Back to trust. Imho they were stupid not to consider that. But family's trust family. Does anybody think someone they trust will renege on the contract, the money they lent, the car they said they could pay for over time but the payments dry up.


They are resistent to other options other than a lifetime of free rent


There is no free rent - it was paid for up-front. Just like you'd buy an annuity and get a pension for life, not till the provider said '' oops that's enough, we don't like this any more''


despite the reality of homelessness.


With that tenancy agreement, there is no way a possession order on a S21 would be granted. That's not just my opinion, that's her own legal beagle.


They could cancel that agreement and walk away with 30k but choose to be potentially turfed out by bailiffs for zero return.


Back to the annuity scenario above - would you accept four years of pension payments, 30K back, after you'd paid 150K for a full life-time pension ? Why should they cancel the agreement ?

Both parties were negligent about risk and optimistic about reward. Now they should be pessimistic on both cases. That agreement is worthless because it can't be honoured.


The agreement isn't worthless. It is binding on the OP. The only question is, is it binding on the lender as well. Because if it is, they will honour it unlike the OP who happily shafts her parents when it doesn't suit her any more.


Both parties caused this, both parties suffer hardship through lack of planning

.

Let's get this straight, the OP got a 250K house for 100K with the proviso the parents lived there rent free for life. She agreed. Could avoid IHT, care home fee's though she implies that didn't cross her mind. She then took a further 50K advance from the bank to !!!! away on a car and whatever. Then X years down the line, she decides her 50K is all gone, her parents aren't dead and she's got this bloody mortgage hanging over her so her parents have to forget what she agreed and move out. And you think they are being unreasonable ? 30K in exchange for a couple of year's rent and a 250K house ?

DaftyDuck

Five years rent, but otherwise this is a valid p.o.v. for the parents - and why the option 2 listed above is short by many tens of thousands of pounds.

Neither side did themselves any favours by the original deal. Some of the options currently offered may put a full stop to the problem for the o.p., but leave the parents destitute in old age.

I just don't see any solution that suits both parties.