Parents renting to buy their house to us.. Complicated! Help!

Melpegz10

Hi all we have a complicated situation.. We have no idea where we stand or what we can and can't do so any advice is appreciated thank you.

Just to note -

Me and my partner are un married2 children
In a council house

The in laws have inherited a house, which they can not sell because the other owner is still alive but with very severe dementia in a care home.
They will move in to this property.

There current house they have said is for my partner and his sister, his sist r does not want it.
So we will be buying her part out..

They have said for us to be living in the house paying X amount into an account which will eventually be his sisters, for say 20 years and the house will then be ours. During the time the house will stay in my mother in laws name.

Basically this way we get a interest free mortgage.

BUT legally, where does this stand?

Being unmarried if my partner decided to kick me out I would be left with nothing is that right? Seeing as our names will not be in the house and we are just paying into an account to his sister.

What's the best legal way to do all this? We're very confused! Thanks

Out,_Vile_Jelly

You need to seek professional legal advice as that is indeed a confusing situation. Note that informal deals with family/friends rarely end well where money/property are concerned.

kazwookie

Go and get proffesional legal advise.

somethingcorporate

^^ Agreed. Way too complicated to risk not taking proper, paid for advice.

teddysmum

This can go horribly wrong, in a number of ways , including:


1) What if the person in care needs their share of the house to pay for care (possibly on a pay on decease basis)? If the house is sold the 'in-laws' may have to leave and need their old home back.


2) If the 'old' house stays in the present owner's name and she needs care, it will be part of her assets, meaning you lose it.


3) The money paid into an account (either in her name or your partner's sister's ) would become part of their assets. If the former the case in '2' could apply and if the latter or both, any benefits will be affected.


4) If you have to leave the house for any reason, it will probably be very difficult to obtain another council house as waiting lists are long.


Both you and your partner could end up paying out money with no property at the end, though this could be similar to paying council rent, where the same applies.


This certainly needs legal advice.

Melpegz10

Thanks everyone, the family are all meeting for a big talk this weekend to sort each other's views and decide amount sect and legal advice is being done on both parts after thats all decided.

But we need an idea of where we would stand before the talk, teddys mum all great points! Thanks, these are the sort of things we need to think about before the talk this weekend. Thankyou

Guest101

Melpegz10 wrote: »

Hi all we have a complicated situation.. We have no idea where we stand or what we can and can't do so any advice is appreciated thank you.

Just to note -

Me and my partner are un married2 children
In a council house

The in laws have inherited a house, which they can not sell because the other owner is still alive but with very severe dementia in a care home.
They will move in to this property.

There current house they have said is for my partner and his sister, his sist r does not want it.
So we will be buying her part out..

They have said for us to be living in the house paying X amount into an account which will eventually be his sisters, for say 20 years and the house will then be ours. During the time the house will stay in my mother in laws name.

Basically this way we get a interest free mortgage.

BUT legally, where does this stand?

Being unmarried if my partner decided to kick me out I would be left with nothing is that right? Seeing as our names will not be in the house and we are just paying into an account to his sister.

What's the best legal way to do all this? We're very confused! Thanks

There's all sort of stuff here:

1: Who will own the house, who's name is on the title?
2: is there a mortgage?
3: you'll be tenants, so your parents will have to by law do certain things

The simple solution is, your parents sell you the house (or gift you it, if unmortgaged).

You remortgage, and pay off his sister.

xylophone

You and your partner buy the house from the parents with a gifted deposit and mortgage. Interest rates are very low at the moment and you might consider a fixed rate for comfort.

The parents use the money you pay them to make a gift to the sister
equal to the gifted deposit and possibly to buy out the interest of the person in the care home?

The gifts will be PETS.

Presumably the parents have inherited a half interest in the house?

Annisele

I think sometimes it helps to consider what you'd do if any of the people involved died, got divorced, went bankrupt, or became too ill to work. It's a morbid exercise, but over a 20 year period there's a reasonably chance something unpleasant is going to happen to somebody - and it's much less emotive if you've thought about it in advance.

So, for example - what if your partner dies? Would your MiL still want you to stay in the house with the children?

What if your MiL goes bankrupt? The house still looks as though it belongs to her, so it might be taken off you. You'd have given up a secure council tenancy for nothing.

What if the sister becomes too ill to work, and can't afford to pay for wherever she's living now. Would she move in with you?

What if you couldn't afford to pay the sister?

The sister doesn't seem to be doing too well out of the current plan. If the house was sold, and your partner and his sister each got half the value now, she could invest her half and get a return. As it is, she'll get her money in dribs and drabs over years - and inflation will eat away at what it's worth.

And then there are tax issues. If the money you're paying is rent, then there'll be income tax on it. If the MiL isn't living in her own house, there'll be capital gains tax when she 'disposes' of it.

In short, I agree with the others - professional advice needed!

bris

Very complicated, does depravation of assets come into this? It's all very well inheriting a house but if it's to deprive the council from collecting on care home fees then this can be reversed.


Of course you haven't said whether these care home fees are being taking care of else where or not but it is something you need expert advice on. CAB may give you some help on this.

tea-bag

Easy to solve, Rent whatever house is going to be empty, use this money split 50/50 with the sister. Use the rental income to buy your council house in 5 years sell or rent council house and buy out sister