Sell grandmother's house now or put a charge on it to pay care home? Advice needed

riverboat83

Hi all

Looking for some advice here. My grandmother moved into a care home in summer 2015. She was assessed recently as needing to pay full fees for it - it took ages for all the financial and health assessments to happen.

Gran has her own home, which she previously lived in and is now standing empty (apart from all her stuff). She has some savings, but not a huge amount so will definitely need the capital from her home to pay the care home fees. She isn't capable of comprehending financial issues any more and doesn't really care what happens to her house now. My mum is power of attorney. My mum and me are my gran's only family.

Basically it seems we (me and mum and gran) have the option to either sell her house to fund the care home fees, or else they put a charge on it to guarantee payment of fees when house is eventually sold (I guess when gran dies?).

If it makes any difference, the house is a small 3 bed semi in a village/town in the NE of England.

We don't really know if it is better to sell or go for the charge option. Does anyone have any advice? On the one hand, mum and I don't live anywhere near gran/her care home, so it is very handy to have her house there to stay in when we go to visit her (inevitably for a few nights at a time due to distance). On the other hand, we are worried about the security risk of having her house standing empty. In terms of value we have no idea if now is a good time to sell or if there is any interest in waiting.

Can anyone advice? It's really difficult to know what to do...

Mojisola

riverboat83 wrote: »

Gran has her own home, which she previously lived in and is now standing empty (apart from all her stuff).

Basically it seems we (me and mum and gran) have the option to either sell her house to fund the care home fees, or else they put a charge on it to guarantee payment of fees when house is eventually sold (I guess when gran dies?).

We don't really know if it is better to sell or go for the charge option.

It's going to cost money and time to keep it in good condition.

The council may not be happy paying the care home bill if you aren't making an effort to sell the house.

As POA, your mother has to manage her mother's finances in the way that benefits her mother most. How would keeping the house empty benefit her?

marksoton

Sorry to hear of your situation, it resonates.

My parents were in the same situation 2 years ago. They held the house for a few months for the exact reason you state,the ability to visit and slowly clear the place.

They were then in a position to move my grandmother to a home near them,is that feasible?

riverboat83

Thanks for your answers

It was the council social worker who suggested putting a charge on the house instead of selling . I need to clarify with mum whether this was suggested as a long term or short term solution.


Not an option to move gran away from current location. I live abroad, mum lives in UK but hundreds of miles away from gran. Gran has lived in her village her while life and has a fantastic support network of friends who visit her frequently where she is. Moving her close to mum would take her away from everyone but mum and it wouldn't be good for her, she wants to stay put.

Good question re what is best for grans finances from POA pov. It's all extra hard because she is my dad's mum, but dad died very suddenly last year and he took care of all financial stuff. Mum is doing brilliantly but it isn't easy for her and I am just trying to support her as best I can.

BrassicWoman

would a rental income from the house fund what you need to find in home fees?

PasturesNew

We went down the "sell it" route. An empty house, full of stuff, just lingers if you feel you've got all the time in the world. An empty house is a liability - not just from an insurance/theft perspective, but general maintenance and safety (e.g. every time there's a big storm you'll be worried). Then there's the accumulation of post - and trouble insuring an empty house.

It'd take a big house in a rapidly increasing market that'd make financial sense to keep.

Once sold, you're not gaining much in interest in the bank, but you're also not having to spend out every month on council tax, utilities, bills, maintenance, insurance and all the other worries that come with running a house (at a distance).

The cost of keeping the house just to stay at occasionally is probably greater than the more convenient route of just staying in a B&B. It also means you can concentrate your time/visits on just visiting her and not also visiting the house and being concerned about things that need doing there.

If she knows many people in the area, before putting it with an agent, drop a note in to all her friends to see if they know somebody who might wish to buy it. You'd be surprised how many people DO know somebody that'd love to move there, to that house.... saving on agent fees.

konark

Your only options are to sell it or rent it out, leaving it empty is a very bad idea.

Renting it out means a fair degree of work, both in sorting the house out, getting it ready for tenants and supervising the tenancy. It will certainly involve upfront costs (renovation) and hassle (tradesmen). Even a (estimate) rental income of £5,000p.a will do little to pay home fees of £25,000+pa. It also seems neither you or your mother are in a position to do this because of your locations.

Frankly, at the end of the day, the result will be the same to you and your gran whatever you do; the entire equity of the house minus about £16,000 will go to the care home.

patanne

Yes re the above post do remind your mother that gran will no longer be self funding once her savings drop. They will extract the Michael given the chance. Once our Mum stopped asking how her house was (about 8 months in her case) we sold it. We were lucky in that most charges stopped once she went in the home, Rates, water rates even scottish power, but it is amazing how quickly an unoccupied house begins to look uncared for and we were visiting a couple of times a week as we were local. Unless the house is in an area where rents are high and property values are low then I would definitely say sell.

We found the whole care home visiting (and watching someone deteriorate - quite rapidly in our case) very stressful even though the carers were very good. The added stress of dealing with the house too was, after about 6 months, becoming a real strain.

Her neighbours were fantastic too & would put a little something in her bins & then put them out on bin day. Little things like that which made the place look occupied - made sure anything through the door went completely through, not stuck there until our next visit.

So basically unless you can make enough from renting & paying an agent to do EVERYTHING to pay the shortfall, then selling is the best option. The social worker wants the charge on the house because that way they are guaranteed their money back. Just to add that my sister made enough selling mums unwanted stuff on ebay to pay a month of the care home fee. It is truly amazing what will sell that you wouldn't give houseroom!

You could have insurance issues too if the house is empty for too long!

knightstyle

Hi, we are in the same position with my MiL, she is 94 and has just gone into a home following a stroke. You need to look at then term costs and how these will be met. It is quite complicated with money coming from different agencies which change after 3 months.
MiLs care home costs £725 a week! So the family have at last agreed to sell the house. Renting was considered but who will look after the house whilst it is let? Plus the tax implications meant a lot more paperwork etc.
At the moment she can sign things but other family members have applied for POA now as it can take a while.
Is she getting any benefits? These tend to be stopped and you have to ask why and get them re-instated.
So my advice is to sell, pay the fees till they reach the limit, £28k? and then get a new assessment done.

antilles

We were in a similar position with Grandfather. His house was empty for 3 years as he became unable to look after himself, so had to move in with Mum. The house fell into disrepair as Granddad's family didn't bother to visit him after Nan's death, despite living close by, and Mum didn't have the time to both look after him and maintain the house. So we ended up selling it. If you have power of attorney then this is fine, you will be able to handle everything.

It's worth pointing out that you should be able to get most charges on the house exempted if someone goes into care, regardless of whether it's a care home or looked after by a family member. You are entitled to Council Tax exemption for instance (I think it was called a category D exemption from memory), charges for water were waived, as well as standing charges for gas/electricity if I remember correctly. So it is worth contacting the council and utility companies to get these frozen.

We ended up selling the house for a number of reasons and I would advise you to do the same. Firstly there was ongoing maintenance to think of and this stacks up to the point where it starts to take up lots of time and money. This all had to be done in one go as the Estate Agent advised the house would be difficult to sell in the condition it was in. We had to repaint a number of rooms to get rid of bad smells (Granddad is a heavy smoker), fix plumbing that had leaked over the winter, chop back massively overgrown gardens, fix a gas leak etc, the list was endless. As you both live a long distance away the situation is even more difficult for you.

Secondly there is a risk of the house being broken into or occupied by squatters, we had at least one attempted break-in. It doesn't take long for people to notice an empty house.

Thirdly your home insurance will be likely void if the house is empty for a long period and something happens to it. You will need to contact the insurer.

What really motivated us to sell it though was that his estranged family members found out it was empty and were attempting to gain access, we believed they intended to sell it and divvy up the proceeds (they have previous form for doing this with another family member sadly). So we sold it as quick as we could.

With hindsight we regretted not selling it much earlier as the maintenance took a lot of time and money and came at a time when Granddad was very ill, causing a lot more stress to be added to an already difficult situation, plus we could have avoided the situation with his estranged family. You tend to kid yourself and keep the house on the backburner 'in case they get well enough to move back in' but in reality it never happens.

So I would say get rid ASAP, you will only have to do it later anyway and you will not regret selling it straight away, believe me!

I would not let it out as this will involve a lot of headaches and ongoing costs, this stress will be added onto your current issues, so it is best to sell in my view.

Hope this helps.

Bettie

we sold the house once my relative was used to the fact she wasn't ever returning. It was getting too much trying to keep it up together, especially the garden. We were worn out running here, there and everywhere. However finding a home for the money that gave some decent return was difficult and her POA decided to purchase another house, smaller, cheaper and fairly new, one with no emotional attachment. It is all done through an estate agent and should show a better profit to help out with care home fees. This would not have been my choice but on paper it seems to work ok. Time will tell.