Advice on eviction

poppysarah

The_Negotiator wrote: »

But maybe I am just a pessimist?

I think someone rushed/was pushed into making a deal that initially sounded good, but if they'd thought it through they'd realise it was an insane idea.

Never help people who run up massive debts. They have no respect for money - theirs or anyone elses.

*Robin*

Would there be room to convert and extend the garage of this property, creating a Granny Flat for OP's parents and allowing OP & family to live in the main house?

It's a sorry situation; I feel for you, OP. :grouphug:

BigAunty

The_Negotiator wrote: »

I think I must have read a different thread to everybody else. It seems that the parents needed to free up money to pay off debts so sold their house to their daughter significantly below market price (and their daughter managed to get a new car out of the transaction too using some of the mortgage money) on the proviso that they live there rent free for life.

Now the daughter doesn't like the deal and wants rent as well as the cheap house, i.e. to have her cake and eat it. Quite rightly the "evil" parents whilst sympathetic to their daughters problem won't pay rent because they dealt with that issue at the point of sale with a mutually signed contract that every party was fully aware of. They paid upfront.

But maybe I am just a pessimist?

There is very little concrete financial information about this issue so there's a big gap there.Yes, there's a 'live rent free' agreement but this now cannot be afforded- the will may be there but they have a drop in income,more children, and the family is going without.

The original scheme was that her parents would pay rent and therefore the daughter could buy a family home for her family too. Somehow,they still got to live in a big house without paying a penny in rent without figuring out, nor caring, how their daughter could support two households.

They got their side of the bargain but she did not because she could not afford to proceed with a second purchase.

However,did you miss the bit where she made a gesture to try and keep her financially reckless parents from losing their home out of care for them following a suicide attempt? And did you miss the bit where the parents in a property much larger than their needs is demanding that the daughter tightens her belt by moving to a cheaper property? And ignoring the OP struggles to buy basic items for her children like school shoes?

The elderly parents do not care how their lifestyle is funded and want to continue to live in their bubble.Their daughter has sacrificed a stable family home for her immediate family by trying to resolve the financial issues of her spendthrift parents.

This generosity has now backfired. It's probably best to put it down to poor financial planning on both sides (yes, there's rancour) but at the end of the day, there was little risk management undertaken. Her parents will lose their home and the daughter will lose her credit record, may never get onto the housing ladder again, has lost her relationship with her parents.No winners, really, because of lack of planning, risk management, proper legal contracts.

The_Negotiator

BigAunty wrote: »

There is very little concrete financial information about this issue so there's a big gap there.Yes, there's a 'live rent free' agreement but this now cannot be afforded- the will may be there but they have a drop in income,more children, and the family is going without.

The original scheme was that her parents would pay rent and therefore the daughter could buy a family home for her family too. Somehow,they still got to live in a big house without paying a penny in rent without figuring out, nor caring, how their daughter could support two households.

They got their side of the bargain but she did not because she could not afford to proceed with a second purchase.

However,did you miss the bit where she made a gesture to try and keep her financially reckless parents from losing their home out of care for them following a suicide attempt? And did you miss the bit where the parents in a property much larger than their needs is demanding that the daughter tightens her belt by moving to a cheaper property? And ignoring the OP struggles to buy basic items for her children like school shoes?

The elderly parents do not care how their lifestyle is funded and want to continue to live in their bubble.Their daughter has sacrificed a stable family home for her immediate family by trying to resolve the financial issues of her spendthrift parents.

This generosity has now backfired. It's probably best to put it down to poor financial planning on both sides (yes, there's rancour) but at the end of the day, there was little risk management undertaken. Her parents will lose their home and the daughter will lose her credit record, may never get onto the housing ladder again, has lost her relationship with her parents.No winners, really, because of lack of planning, risk management, proper legal contracts.

Where does it say that they were originally going to pay rent? If I sold my house to somebody for significantly below market value I would expect something back. Otherwise I could just sell the house for market value.

BigAunty

The_Negotiator wrote: »

Where does it say that they were originally going to pay rent? If I sold my house to somebody for significantly below market value I would expect something back. Otherwise I could just sell the house for market value.

Actually, you have a valid point. Originally, there was no expectation of rent, then a HB form was filled in with the hope they could pay rent that way, then recently it seems that the OP asked them to pay rent due to their financial struggles and this was scoffed at.

It looks like the OP sleep walked into a financial arrangement without any winners in the long-run, making the fatal mistake of mixing family and business.

Without the OP supplying numbers, we won't know what kind of return the elderly parents have had on their investment.It did give them the opportunity to clear their debts (can't recall if they took this or not) and they did get to live in a property free for 5 years when previously they were at risk of repossession.

Perhaps all that's happened is that the OP got a lump sum from buying their property at either market or less than market rates (its not clear) and then has pretty much spent that sum back on them servicing the mortgage. Without numbers, this is just speculation.

The_Negotiator

BigAunty wrote: »

Actually, you have a valid point. Originally, there was no expectation of rent, then a HB form was filled in with the hope they could pay rent that way, then recently it seems that the OP asked them to pay rent due to their financial struggles and this was scoffed at.

It looks like the OP sleep walked into a financial arrangement without any winners in the long-run, making the fatal mistake of mixing family and business.

Without the OP supplying numbers, we won't know what kind of return the elderly parents have had on their investment.It did give them the opportunity to clear their debts (can't recall if they took this or not) and they did get to live in a property free for 5 years when previously they were at risk of repossession.

Perhaps all that's happened is that the OP got a lump sum from buying their property at either market or less than market rates (its not clear) and then has pretty much spent that sum back on them servicing the mortgage. Without numbers, this is just speculation.

Hence my pessimism. Each new piece of information alludes to there being more to this than initially written.

Somerset

BigAunty wrote: »

There is very little concrete financial information about this issue so there's a big gap there.Yes, there's a 'live rent free' agreement but this now cannot be afforded- the will may be there but they have a drop in income,more children, and the family is going without.

The legal issue is there was no agreement about living rent free or paying rent, one for the courts to decide.


Playing devil's advocate, if a company paid a reduced price for a house with the proviso the tenant could live rent free forever, nobody here would be concerned about that company's difficulties or whether the company should re-write the terms.


The killer is the missing 100K that was 'gifted' to the parents.

Granariesgirl

Hi Rocky99,

I think you really need to get a second opinion with a lawyer who specialises in litigation / contract law.

Meanwhile if I were you, I would keep paying the mortgage so that you can't be blamed for deliberately breaching contract with your parents & making them homeless - Cover Your Ar - - !

You also need to be SEEN to be trying to resolve this situation in a reasonable & equitable manner: this way if it goes to court you will be able to prove you explored all possible avenues BEFOREHAND. I would suggest:

1) Both of you write a letter to your parents recapping the whole story so far, explaining your dire financial situation & suggesting a couple of equitable solutions (need advice from more experienced than I for this - Shelter or other?) & Mediation to sort the situation out. Send two copies with proof of posting from 2 separate Post Offices & keep copies (note plural) of letter, copies & originals of proof of posting. Make the letter factual, not emotional & request that they reply IN WRITING with any suggestions they have to resolve the situation equitably, or corrections of the facts. Request a reply within 2 weeks.

If they call, request that they write or email you then make an excuse to hang up before you get browbeaten - NOTE ANY TIME/ DATE OF PHONE CALLS & GIST OF CONVERSATION WITH THEM & KEEP COPIES!

2) If no written reply, resend letter with covering letter explaining that no reply has been received to the enclosed missive & demanding written reply within 2 weeks: re-suggest Mediation & explain your willingness to attend a Mediation session arranged by them if they prefer. Send two copies with proof of posting from 2 separate Post Offices & keep copies (note plural) of letter, copies & originals of proof of posting.

3) If no response as requested or if response negative, go back to the legal eagle you SHOULD have found by then with all the proof of your attempts to resolve the situation in an equitable manner & your parents' responses (if any) & take it further.

Have you been to Debt Advice / CAB?

Good luck & stay strong.

The_Negotiator

Somerset wrote: »

The legal issue is there was no agreement about living rent free or paying rent, one for the courts to decide.


Playing devil's advocate, if a company paid a reduced price for a house with the proviso the tenant could live rent free forever, nobody here would be concerned about that company's difficulties or whether the company should re-write the terms.


The killer is the missing 100K that was 'gifted' to the parents.

What about this?

"When we completed the mortgage my father drafted together this 'contract' which states they can live in the house rent free until death,"

DaftyDuck

I haven't commented on this before, but I have been reading it. The house was valued at £250,000, the parents were paid £150,000, the OP & partner thus making, at the time, a potential profit of £100,000 which, as I understand it, was in lieu of rent in perpetuity.

BigAunty highlighted the mistake:

making the fatal mistake of mixing family and business

If this were a professional equity release scheme, the parents would not be expected to downsize/pay additional rent, etc. The change in circumstances have occurred to the OP & partner, not the parents. The £100,000 equity profit should have been seen as sufficient for the interim rent. Since only five years have passed since this point, that would equate to £20,000 rent on the property - a tidy return. To be diminished by future survival, but that's the actuarial reality of such deals... (Jeanne Calment anyone?)

However, the OP does not have sufficient capital to continue with this situation until they are able to "cash in" the asset... a problem accentuated by that fateful mix of family & business.

It does seem that, as a business arrangement, it's not up to the parents to cut back/move/pay rent. Their expectation of five years ago seems to be that, in exchange for the low selling price.

There was, at the selling point five years ago, an additional £50,000 released to the OP & partner. (£100,000 to parents, £50,000 equity released to OP). One point the parents may feel (and I have no opinion whether it is justified or not) is that their £100,000 had to pay off debts, leaving £20,000 and whatever pension amount for the rest of their lives, (with no ownership of house, so no further equity release, and no future income), whilst the OP & partner gained an immediate £50,000 equity release, in addition to the current salaries they earn, in addition to the eventual remaining equity in the house. That should have given them an additional £10,000 per year so far (also diminishing with time, of course).

It does appear that at the time the deal was made, it was seen as fair by all parties, and beneficial to all parties. The problem is that, for one party, that no longer seems appropriate or possible while, for the other, it not only seems appropriate but vitally necessary.

The parents could have sold the house on the open market, paid off their debts, and had at least £170,000 cash to invest/spend on rent/blow on a cruise. Instead, they have their rent paid, and £20,000. That may not seem like such a deal to them!


Edit: Looked up Mme Calment, and the bit I remember isn't obvious for those who don't know the tale (yes... it is actually on Wiki...!). Aged 90, she took out a form of equity release with her lawyer. Seemed like a good deal; he agreed to pay her a monthly dividend... he died long before her, aged 77, and his widow, then his son, continued with these payments for 35 years, until she died, aged 124... It cost many times the value of the flat (Wiki says double: I have seen quadruple mentioned elsewhere).