Advise needed please

Edna's_Lad

Hi all MSE folks,
hoping for some advice asap.
I'm in the throws of buying my elderly mum's council house,
I'm paying cash, & buying it for my MUM. It will be documented as a "Deed of Trust" so when the dreaded time comes, i will inherit the property.

My question being, as the house will be in Mum's sole name & i have legally paid for it....What happens if she needs to move into long term residential care ??? Would she be made to sell the property to cover the cost's of her care, even though i have paid for the house.

Thanks in Advance

Edna's Lad

Hoploz

I'd say if it is in her name she would need to sell for care home fees.

Why not have it in your name if you are buying it? Is this because you are not the council tenant and would not be eligible for the discount she can get?

Guess can't have cake and eat it? One way or another it looks like you can't necessarily have it all.

G_M

Edna's_Lad wrote: »

Hi all MSE folks,
hoping for some advice asap.
I'm in the throws of buying my elderly mum's council house,
Is this a Right To Buy? How can you buy it if you are not the council tenant?

What (I guess) is happening is you are either giving, or lending, your mum the money and she is buying it.

Yes?

I'm paying cash, & buying it for my MUM.
Ah! So yes. The house will be your mum's

It will be documented as a "Deed of Trust" so when the dreaded time comes, i will inherit the property.
Why is the Deed needed? She could (and should anyway) write a will.

My question being, as the house will be in Mum's sole name & i have legally paid for it....
Wrong. She paid for it using money you either gave or lent her. And yes, the house will not just be "in Mum's sole name", it will be her house.

What happens if she needs to move into long term residential care ???
Her assets, including the house, will be assssed. If they exceed (around) £18K she will not get local authority funding for her care.

Would she be made to sell the property to cover the cost's of her care, even though i have paid for the house.
Yes.

You need to re-think this whole plan.

bruich76

I'm guessing the reason why it has to be in your name is because of the Councils right to buy and the Council would not sell it otherwise, i.e. it has to be purchased by the tenant. There's a number of things that you could try and do. However, technically speaking its a bad situation for you until some point in time in the future when the terms the Council impose on the transfer expire.


That's because the Council will impose covenants saying that it cannot be sold in X years without them being due the difference between the value you paid and the value you sold. That applies to any disposition as well.


So until that period expired basically you are open to anything happening and if you and your mum fell out or even if she decided just not to give it to you back then you wouldn't have a leg to stand on.


Statutory declaration would help but its not absolute and there are ways they can fall away.


Not really sure what I would recommend to be honest and there is no 'good' way to do it.

StumpyPumpy

I think your Mum is so lucky to have a son like you. Someone who will give her a large sum of money in her dotage to secure a property for her to live in whilst she remains independent and a huge asset that can be used to pay for her to get the best possible care should she become infirm and unable to care for herself.

Many people with parents who live in a council house would be happy to see them dumped in the cheapest council financed care home in the area leaving them to rot in their declining years whilst enjoying added wealth to which they are not entitled, but not you, you only want the best for her and would, no doubt, condemn these people as money grabbing exploiters of the old.

SP

Pixie5740

That's very kind of you to give/lend your mother some money so that she can exercise her right to buy. If it's a loan then you could put a charge on the property that way should your mother require residential care later in life you will get your loan back and the discount plus any capital appreciation will go towards funding your mother's care giving her a bit of comfort in her twilight years.

TBagpuss

Pixie is correct. If you are lending her the money you can have a legal charge registered against the propery entitling you to the money back when the hosue is sold. Your mum will own the equity (which in the forst instnace will be the amount of her disclount) and that would be used if needed to fund care costs.

Cakeguts

Apart from funding for you mum's future care home costs I can't see the point of this exercise. You mum has a secure tenancy so she can live in the council house for the rest of her life or until she can't cope at home on her own so how does buying the house make any difference to this? She will be responsible for the upkeep on the house but she won't pay any rent.

Would it be just as good to invest your cash so that you can pay for your mother's care without going through the cost of buying her council house? If you put a charge on the council house you will only get back the exact money that you lent your mum. The increase in value and the discount will still belong to your mum. You would do better to just invest the cash and use the interest to pay for you mum's care.

Hoploz

Cakeguts wrote: »

Apart from funding for you mum's future care home costs I can't see the point of this exercise. You mum has a secure tenancy so she can live in the council house for the rest of her life or until she can't cope at home on her own so how does buying the house make any difference to this? She will be responsible for the upkeep on the house but she won't pay any rent.

Would it be just as good to invest your cash so that you can pay for your mother's care without going through the cost of buying her council house? If you put a charge on the council house you will only get back the exact money that you lent your mum. The increase in value and the discount will still belong to your mum. You would do better to just invest the cash and use the interest to pay for you mum's care.

Yes, there is no benefit to the mum here. She will have all the responsibility, worry and headaches about looking after the house, which she does not have now. Even with a willing son or daughter to help out this is a big and unnecessary responsibility. My own experience is that even though I sort everything out for my elderly mum it does not stop her worrying about it all. Indeed, in this proposed scenario the mum will have a huge additional worry about what will happen about care home fees if it comes to it, which she does not have to think about now at all.

The only benefit here is that when the mum does die the OP will be able to rent out or sell this property, it having been bought at a large discount.

Which doesn't help the mum out one bit.

Assuming Mum does leave it to him or her not a random charity or the cat.

Edna's_Lad

Stumpy, in reply to your message...that's one of my lines of thinking, the other is my sister's husband has walked out on her leaving her financially struggling with 2 kids.

I'm buying the property in the hopes my sister could give up her house, move in with Mum & help care for her, which would be an advantage to them both....no one wants an eldery parent stuck in a care home, ...well, i certainly don't, we are a very close family.

I'm techinically homeless, as i walked out of MH when i found my wife cheating on me, so i live in a truck all week & stay with Mum at weekends, to help with anything that basically needs doing.

I want peace of mind not only for Mum, but for my sister too, but family stability after what my sister has been through & seeing how she struugles, to work full-time, take care of Mum, the kids is too much to bear.

It would be nice to give something back to Mum, & some reassurance in her older years, i'm not interested in financial gain for myself, it's the family home & i thought it would be nice to keep it that for many years to come.

Thanks Edna's Lad

AnotherJoe

Edna's_Lad wrote: »

It would be nice to give something back to Mum, & some reassurance in her older years, i'm not interested in financial gain for myself, it's the family home & i thought it would be nice to [STRIKE]keep it that for many years to come [/STRIKE]profit from it when mum dies.

Transparent self-serving rubbish. She has full security and low costs as she is.

If she buys the house, she is responsible for all the costs and has no reassurance at all in later years.

Your sister could go and live with her now, mum doesn't need to buy the house for that to happen.