selling an inherited housing association flat

krazydiamond

Last year a relative died intestate and a genealogy research company found myself and 2 others as beneficiaries to the estate. The flat he lived in was 100% owned by him but is a housing association flat for over 55's. The flat was left in a terrible state of disrepair and has had to be gutted. He also left a lot of debts behind. I am finding out that because it is a shared ownership property everything is more complicated and costs more money when it comes to selling plus we can only sell for 70% of the market value. There is also a housing association service charge (for the communal areas) accruing on the property (£126.00 per month) which seems unfair considering nobody is living there! An estate agent has valued it at £30000 if we don't renovate and £55000 if we do (these are the 70% values). It looks like we will be spending circa £10000 to refurbish but £27000 will be deducted after the flat is sold for the usual sky high solicitor fees, paying back the debts and various charges that the housing association take. I am wondering if the housing association should be contributing to the renovation costs at all or if we did renovate, whether they should only receive the 70% price of what it is valued at before renovations and the beneficiaries receive a 100% profit of the difference (seeing as we will have spent the money on renovating it). I am in a real quandary as to what to do as I don't want us to spend all that money renovating it and then have the possibility of it not selling at the price the estate agent gave - the profit we make will hardly have been worth all the hard work. Then again if we don't renovate it how many over 55's are going to want to purchase a property that needs full renovation? Any advice would be greatly appreciated!

getmore4less

Dump it not worth the hassle.

check the EA value independantly other sold/asking prices for similar.

some(not all) AE see these as an easy pickup for a builder mate, often like yourself the risks are too high(unless you have another relative interested) so want rid.

A developer can flip these far quicker than you could and renovate at much lower cost.

jamei305

Sell asap to reduce the ongoing bills. Then it's all someone else's problem far sooner.

G_M

Who has been named as Administrators of the estate?

You do not/will not own anything till Probate has been granted, and all the estate's debts (and tax if any) have been paid.

The administrators may have little choice but to sell as it is, in order to raise money to pay the debts - that is a matter for them.

You (they?) should certainly be looking at the HA rules ie what payment is due if any where the property is empty (there may/may not be discounts) as well as other costs.

Council Tax, for example, is charged at nil rate after the CT payer dies provided the property remain unoccupied.

You could also investigate whether HA shold contribute to renovation, since they part own, and will benefit financially from the increase in value - but again, you'll need to look at the paperwork to find out.

Mojisola

krazydiamond wrote: »

Last year a relative died intestate and a genealogy research company found myself and 2 others as beneficiaries to the estate.

I am in a real quandary as to what to do as I don't want us to spend all that money renovating it and then have the possibility of it not selling at the price the estate agent gave - the profit we make will hardly have been worth all the hard work.

You do know that you don't have to handle the estate at all if you don't want to?

By the time the debts are paid and the flat sold and anything left over divided between three of you, is it worth the effort?

r2015

I just wondered, can someone be forced to inherit something like a dilapidated flat that has not been left to them in a will?

AdrianC

r2015 wrote: »

I just wondered, can someone be forced to inherit something like a dilapidated flat that has not been left to them in a will?

Of course you don't have to accept the bequest. If one of the three turns their share down, the other two would then have 50/50 ownership. Or just give the money that you end up with to charity.

It seems to me there's a very simple way out of the OP's problem. If the HA don't want to buy it back, assuming there's a first-refusal clause in the lease, then just shove it to auction as-is, then split the resulting money three ways. Minimal hassle.

martindow

AdrianC wrote: »

Of course you don't have to accept the bequest. If one of the three turns their share down, the other two would then have 50/50 ownership. Or just give the money that you end up with to charity.

It seems to me there's a very simple way out of the OP's problem. If the HA don't want to buy it back, assuming there's a first-refusal clause in the lease, then just shove it to auction as-is, then split the resulting money three ways. Minimal hassle.

What if the sum realised is less than is needed to cover the debt? As administrators you have serious responsibilities and do not want any come back from a creditor claiming you could have done more to pay what they are owed. Does the genealogy company want a proportion of the money? If so they are going to be particularly keen to chase it up.

Unless you are confident that you will be left with a reasonable sum at the end of it all I would be very wary of undertaking the administration of this estate.

ukmike

AE see these as an easy pickup for a builder mate

The builder mate would have to be over 55 though to buy it!

AdrianC

martindow wrote: »

What if the sum realised is less than is needed to cover the debt?

If the estate's debt is more than the value of the estate's assets, then the excess debt is written-off. You can't inherit net debt.

As administrators you have serious responsibilities and do not want any come back from a creditor claiming you could have done more to pay what they are owed.

The OP hasn't said they're the executor. If they are, then who hired this genealogy outfit?

getmore4less

Estimate of net estate for probate what is it?

before doing anything establish that


This has all the hallmarks of don't touch with a bargepole and just accept what drops out the end if someone takes it on.