Inheriting a house with tenants who have a "life interest"

NicolaElize

Hi all.

I'll try and keep this short and sweet. My father in law has just died and his last remaining asset was a house that has been occupied by his second wife's parents for the last 20 years. He was given 18 months to live 11 years ago when they divorced, and owned several other houses and as such allowed them stay there after they divorced.

A year or so later he tried to get them out but their solicitors said as house prices had gone up since they moved in (around 7/8 years prior), he would have to return them to the position they were in financially (as in the house they would've bought 7/8 years before they moved in might have been £60k, would now be £120k) so they asked for 60k) to agree to leave which him and his new wife decided wasn't worth the hassle so they signed an agreement that they could stay, as long as they carried out all repairs and maintenance.

He signed it and returned it to his solicitor along with a question that asked does this become null and void upon my death? Now I cannot find a response to this letter anywhere and any reference in various papers and valuations of estate over the previous 10 years of divorces and whatnot, all suggest the parents have a lifetime interest.

So my question is (obviously we will contact the solicitor who dealt with this) - would be, would such an agreement die with him? i realise it entirely depends on what was in the agreement, but any advice would be great.

Oh and there is a will it's all being sold and split 3 ways but obviously nothing's getting sold if there's people living there!

Any advice would be very welcome! Thanks

DandelionPatrol

NicolaElize wrote: »

Hi all.

I'll try and keep this short and sweet. My father in law has just died and his last remaining asset was a house that has been occupied by his second wife's parents for the last 20 years. He was given 18 months to live 11 years ago when they divorced, and owned several other houses and as such allowed them stay there after they divorced.

A year or so later he tried to get them out but their solicitors said as house prices had gone up since they moved in (around 7/8 years prior), he would have to return them to the position they were in financially (as in the house they would've bought 7/8 years before they moved in might have been £60k, would now be £120k) so they asked for 60k) to agree to leave which him and his new wife decided wasn't worth the hassle so they signed an agreement that they could stay, as long as they carried out all repairs and maintenance.

He signed it and returned it to his solicitor along with a question that asked does this become null and void upon my death? Now I cannot find a response to this letter anywhere and any reference in various papers and valuations of estate over the previous 10 years of divorces and whatnot, all suggest the parents have a lifetime interest.

So my question is (obviously we will contact the solicitor who dealt with this) - would be, would such an agreement die with him? i realise it entirely depends on what was in the agreement, but any advice would be great.

Oh and there is a will it's all being sold and split 3 ways but obviously nothing's getting sold if there's people living there!

Any advice would be very welcome! Thanks

Get to the bottom of exactly what was agreed, because without knowing that, there is very little useful that anyone here can say. Get hold of the details for the property from the Land Registry too - just to check out any nasties in the registration.

I suspect you will encounter a certain amount of bluff and bluster from the present residents, who may not be too keen to tell you exactly what rights they do have - preferring probably to big up their position.

If things are not stacking up to a coherent story, you may need to serve them a Section 21 notice of intended repossession and take them to court for a repo, if only to get them to defend and produce their paperwork. But doing this would be an advanced topic, so don't start off with this.

Annisele

What DandelionPatrol said - get the agreement first.

Life interests are usually for the life of the tenant, not for the life of the landlord. But without the agreement, we're just guessing.

(If the agreement isn't available, or if there's a dispute about its validity, you have a different problem - but I think it's definitely the place to start).

NicolaElize

Thankyou for both of your replies, I suspected exactly that I think I'm just looking for some confirmation that were not the first people this has happened to! Feeling very overwhelmed at the minute.

It might be worth noting they've never paid any rent ever and continue to live there for free. But I highly doubt that makes any difference.

Again thanks both and eager to hear anyone else's story or advice. Thanks

AdrianC

Only the solicitor can tell you - but, for the moment, you have to assume the worst.

On the bright side, I'm assuming they're not in the first flush of youth...

xylophone

Just as matter of interest, you refer to the house occupied by your late FIL's ex in-laws as "his last remaining asset" - what about the house he occupied at the time of his death?

And does he leave a widow, the third wife, who appears to have entered into the agreement to allow the ex-in-laws to remain in the house?

If so, does she have a copy of the agreement?

Pixie5740

If they've never paid rent then they are not tenants (I think). Don't ask them for any rent in case you create a tenancy.

Other than that you'll just need to find out exactly what agreement they have to continue living there before you can decide your next move.

NicolaElize

His third wife and he divorced on good terms some 14 months ago, she has been really helpful so far.

He was renting a small property for one after selling the matrimonial home, she got her half back and his half got taken via a lengthy court battle with the evil second wife to send their privately educated son to university in America despite his only asset being that house that he can't sell, due to them living there, and only having a very small fixed sum to live off for the rest of his life. As it happens the rest of his life was a mere few weeks from the final hearing and losing all his cash.

You have a point about them entering into an agreement as a married couple but presumably she would have no dealings now there divorced? And no we asked her and she doesn't have a copy nor can she remember what was in the agreement.

We definitely are assuming the worst. Just a bit gutting. My husbands uncle is the executor so it will presumably be left to him to do any further digging other than the paperwork in his house?

xylophone

I think that your husband's uncle, as executor of your late FIL's estate, should approach the solicitor who dealt with the agreement between him and the ex-in laws - if he replied to your late FIL's question in a letter, a copy should be on file.

Did the same solicitor draft FIL's will?

moneyistooshorttomention

There is a specific legal word for "something that someone does because they think things are a specific way and have based their choices on that". I cant recall what that legal term is now - but I think that will probably be the concept being employed by these peoples' solicitor. That is - he is arguing that they based their decision to occupy this house (rather than buy their own) on the fact they would be allowed to live in this one as long as they please.

It is a valid point that the money they would have used for buying their own house will need to be higher now - ie because house prices have gone up whilst they have been living there.

HOWEVER - my suspicion is that they are going in for a bit of "bluff and bluster" BUT know they don't actually count as tenants because they aren't actually paying any rent. From this - I presume they don't have a proper tenancy agreement either???

Add the fact that they haven't even been paying any rent in all that time and you could argue that any disadvantaging they have had by the housing market rising whilst they were is counterbalanced by the fact that they have had this saved rent money to stash away into their savings all that time. The fact as to what they have actually done with that saved rent money is irrelevant. They have had that saved rent money for themselves and all they have had to spend out of it is any money they have spent on maintaining the house.

One of my very first questions to them would be to ask them for detailed accounts of exactly what maintenance they have done to the house whilst living there and details of the bills for that maintenance. Personally - I would be willing to bet they've spent b&&&&& all on maintaining that house and just kept all that saved rent money for themselves to spend as they please. When they seemed to have "lost" the details of what they spent on the maintenance/seem to have "forgotten" exactly what they did - they would be very likely to get told exactly how much rent money they should have been paying for a house like that for all those years.

personally - I would certainly find out what rent they would have to pay on the place on the open market and then figure out how much they would have paid if they had been renting it:cool:. They will have saved themselves thousands of £s (at the expense of your deceased relative) I'm quite sure and I am wondering how well that would match with how much extra it would cost them to buy themselves a home to live in (ie compared to what it would have cost had they done so at the time).

I cant say I have any sympathies with this couple - as they must know very well they have been free-riding all this time at someone else's expense. Moreover - a someone else who couldn't afford to subsidise them like that.

Good luck.

EDIT; A further thought I have is that, even if that agreement for them to stay there for their lives proves to be watertight, check VERY carefully what is stated about the level of their obligations to maintain the house in lieu of rent. Whether the wording is "maintaining to habitable standard", "maintaining to appropriate standard" or absolutely specific stuff like "will have the gutters swept every year/note that roof needs replacement in x years time and undertake to do that/replace the kitchen and bathroom every 10 years" etc.

Personally - I would (as landlord) exercise my statutory right to inspect my property (ie with that 24 hours notice the law says) and go through it with a fine toothcomb listing:
a. everything they've done (probably not a lot)
b. everything that needs doing and costing it out. I'd say its a racing certainty that the place will need a new kitchen by now for instance.
c. Have they even had the usual yearly check on central heating system?
d. What about insurance cover for the house itself? Who covers that? They are probably due to do so - tell them to hand over proof they are doing so.