Building bungalow for relative on my land

lingwood

Hello

Just looking for some advice /guidance on possible ways to deal with the following.

We have a garden of approx 1 acre and are looking to build a small bungalow (6 x 10 m 60m2) in one corner for the mother in law who has just divorced using her split of the money.

She would supply the money to build the shell to water tight but I would do all internal fit out plumbing electrics etc.

So quite a bit of my time involved.

She has no plans to re marry (she says) or move on, so technically living in it until what ever happens

Some have suggested setting up an agreement in the form of a lease hold.

Others have said she just signs over to U.S. But we guarantee her to live there until she needs

Ideally in many years from now we might fully split this bungalow and portion of land off from our property and either down size our selves to it, sell it on or rent it out.

Any thoughts please?

Bossypants

Sounds reasonable in principle, have you applied for planning permission?

Regarding the leasehold option, others on here will know more, but my understanding is that you would lose significant rights here, based on the way leasehold/freehold law works in practice these days. I think it would be better to set up some kind of lifetime usage agreement for her, but you (both of you) really need to get proper legal advice on this, so that everyone fully understands exactly what they are getting into.

eddddy

Is your property mortgaged? If so you will need the lender's consent to lease out part of the land. In fact, you should really get the lender's consent before offering any kind of tenancy agreement.

You're probably aware that you will need planning consent and building control approval.

In terms of the agreement you go for, I guess the important thing is to consider all eventualities. e.g. You decide you want to move somewhere else but your MiL wants to stay, your MiL decides she wants to move somewhere else but you want to stay... etc

lingwood

Thanks for replies

Planning permission building regs I am all ok with,

Yes property / land is under mortgage so thanks for that advise.

Quite a difficult with multiple scenarios problem , needs quite a bit of thought.

Ideal and simplest is we just become owners, and she lives rent free until the end! But never say never for many events.

I guess we will know cost to build, and if we get cost of land and in end we have to sell for what over reason either way, we can work out up lift and split accourdingly?

A lot of thinking needed. Suspect will get a solicitor involved but just need some options first

martindow

I would have thought your first step should be to check out the planning side. If the local authority will not grant permission you do not want to spend any money on solicitors, etc. on a fruitless project.

lingwood

martindow wrote: »

I would have thought your first step should be to check out the planning side. If the local authority will not grant permission you do not want to spend any money on solicitors, etc. on a fruitless project.

lingwood wrote: »

Planning permission building regs I am all ok with,

Planning permission building regs I am all ok with,

tom9980

lingwood wrote: »

Planning permission building regs I am all ok with,

You say that but are you sure? no way planning would let me do this you make it sound so trivial when it is often the biggest obstacle.

lingwood

I say it because I have it!

Hence why I am not asking about these "trivial" items. Planning straight though no problems.

In the last five years we have done 2 other extensions. A 40ms kitchen extrndion and just completed a 250m2 extension inc double garage, 2 storey extension and 110m2 single story for indoor swimming pool

All with not planning questions

It all depends where you live

System

There is a big difference between extending your dwelling and building a second completely separate dwelling on your land.

lingwood

Thanks all for your planning application comments, but my question is not about this as I already have it

Annisele

Will the bungalow be entirely self contained, with its own kitchen and bathroom facilities? If it is, I suspect your lender will have significant concerns about it - and you might end up having to remortgage with a specialist lender. Or, depending on the LTV of your current mortgage, you might be better off splitting the titles now. But I think you'd need specialist advice on that.

The problem of how your MiL's money is used (whether you borrow it, whether she buys something from you etc) depends very much on what you're actually planning to own. Will you have one title with two buildings on it? Split into two? Something else?

I think it's also worth considering what would happen in the event of the death/divorce/bankruptcy/illness of everyone involved. It's morbid, but I think constructing nightmare scenarios can help you think about who really ought to own what. If you/your spouse/your MiL disagree, it's far easy to discuss that when emotions aren't running quite so high.

For example, if MiL did marry/divorce, what then? What if your spouse dies first - would you still want to live with MiL? What if you can't afford to pay your mortgage, and your lender tries to repossess the whole affair? What if you or MiL want to move to a different area?