Power of Attorney and house purchase

della11

I'm shortly to have the power of attorney for a relative who's 87 and just moved to a nursing home.
The property needs to be sold to pay for the fees but I'd like to buy it but am worried this may not be allowed. Would I in effect be buying a house from myself? Would it be advisable to have a third party involved? And how would I get the correct value?
I guess I really want to know what are the pitfalls.

getmore4less

The key people that care will be

If the money runs out the council/care providors.

If not who will inherit whats left they will want to see that a fare price was paid.

poppysarah

Anything you do has to be in the best interests of the relative.
That means getting the best price for the property.

Get it valued by 3 EA as if you were going to be selling it. Ask for realistic valuations and see how you feel about the price they suggest.
The only way to actually test the value is to put it on the market and see what it goes for.

della11

I would inherit it.

Linton

mmm, my first thought was that you shouldnt buy the house because of the danger of apparent conflict of interest. If you put it on the market you would have the advantage over other bidders of knowing what the competition is up to and would waste a lot of people's time and possibly money if you were almost certainly going to buy anyway. You couldnt give yourself a good deal, and so must visibly pay the market rate or perhaps a bit more.

On second thoughts - what about putting the house up for auction? Would that avoid the problems? Then its up to you if you want to openly outbid everyone else.

BitterAndTwisted

You need to pay the fair market-value. Doing anything else would put you at risk. You have a responsibility to act in your relative's best interests, not your own, so do it by the book and be able to prove that you have. By buying it yourself you would save your relative paying x percent to an agent in commission. Do not use the same conveyancing solicitor to act for both of you

bouicca21

As a matter of practicality who is there to be upset by this conflict of interest? Are there other relatives who expect to inherit something or would like the opportunity to buy? If there are, tread carefully.

If there aren't then you need to take into account any possible accusation of deprivation of capital. So also tread carefully.

Make sure you have a paper trail to show that you have acted completely above board. I think three EA valuations should be fine - or, perhaps better, you could pay for a valuation from a surveyor.

xylophone

In these particular circumstances, I would pay for a professional valuation from a RICS surveyor.

All records of the transaction should be carefully preserved to ensure a clear audit trail.

Make sure that your relative is represented by her own solicitor, not yours.

googler

xylophone wrote: »

In these particular circumstances, I would pay for a professional valuation from a RICS surveyor.

> > > This. A surveyor's verdict on the market value is generally accepted for any legal purpose, including inheritance tax, CGT, etc. it will/should be acceptable here.

All records of the transaction should be carefully preserved to ensure a clear audit trail.

Make sure that your relative is represented by her own solicitor, not yours.

Agree with both.

della11

Thanks to everyone for your really helpful answers. I think the survey is the best place to start especially as the property is in very poor condition and a big project for someone if not myself.

della11

As regards my relative having own solicitor unfortunately she has dementia and is unable to instruct anyone herself. I would be the sole benefactor.
I have what my friends call a strong moral compass and so it's inbuilt to do things honestly and above board.