Buying out stepfather for family home

d4gl15h

Hello
I am looking to buy my step dad out of my family home in 4 years time when he retires.
Basically we lost my mam in 2012 and in her will she has left her half of the house to me but he has life time tenancy.
He has moved on now and we have an excellent relationship but his new life is up Scotland he will be moving into a mortgage free property and he is happy to let me buy him out so 50% of the homes value and put that into his pension and live out his days up there.

My question is what is the best way to approach this situation ? I have a bit experience before with my first home and when my mam died we transferred the deeds to my name and I remortgaged it into BTL and paid him off as my original mortgage payment was actually against there house.

Would that option be the best way to approach this as last time it was my house just getting deeds transferred but obviously this time we have the life time tenancy added into it.

I don't want to go direct mortgage route as I would need 25% deposit and 3% stamp so is it a case of i would need a transfer of equity then remortgage like I have done before ?

Regards

kingstreet

You don't need any deposit as you already own 50% of the equity and you are purchasing his 50% of the remaining equity and with it, his interest will end.

00ec25

please can you clarify who currently owns the house, you say 50% was left to you when your mother died, who owns the other 50%?

stepfather's lifetime tenancy does not mean he owns that remaining 50%, it just means he can live in it for the remainder of his life.

Removing stepfather's lifetime tenancy right has nothing to do with ownership, it is simply him giving up his legal right of occupation. Obviously if you offer him a financial incentive to do so he will be more inclined to agree to do so, but he does not appear to own an actual % of the property.

if you need to borrow to raise the money for such a financial settlement then it depends who owns the remaining 50% as to whether you can take out a mortgage secured on that property as the lender will want all owners to be named on a mortgage.

kingstreet

...he is happy to let me buy him out so 50% of the homes value and put that into his pension...

I read the above to indicate there is a 50% share and a lifetime interest over the OP's share.

Could be wrong though, so clarification would be helpful.

00ec25

kingstreet wrote: »

I read the above to indicate there is a 50% share and a lifetime interest over the OP's share.

Could be wrong though, so clarification would be helpful.

indeed, I too read it the same way, but

d4gl15h wrote: »

I don't want to go direct mortgage route as I would need 25% deposit and 3% stamp so is it a case of i would need a transfer of equity then remortgage like I have done before ?

it appears OP wants to get a mortgage eventually as the only way to raise the cash required for the financial settlement with stepfather and with mention of the 3% SDLT it is also unclear if OP already owns another property elsewhere or if this is the only property the OP currently owns and he lives in it whilst stepfather now lives in Scotland

G_M

d4gl15h wrote: »

....... he is happy to let me buy him out so 50% of the homes value and put that into his pension and live out his days up there......

I'm sure he is happy!

He will be getting a far better deal than he is entitled to (on the basis of what you've said).

He does not (appear to) own 50% of the property, so is not entitled to 50% of the value.

she has left her half of the house to me but he has life time tenancy.

This is legally unclear.

* you own 50%
* he owns a lifetime interest
* someone else owns the other 50%. Who?

I suggest you

a) read your mum's will again, carefully, and either post the wording here or speak to an inheritance solicitor
b) discuss the matter with your mum's Executers (or was that you......? or him........:eek:)
c) download the Title for the property from the Land Registry here and see who actually now owns it

A 'lifetime interest' is not 'ownership'. It is simply a right to live there (like a tenant but without paying rent).

Indeed - in some cases, if the person with the 'lifetime interest' moves out he forfeits the interest, so he may already have no right to either a home in the property, or the value of the property.

Read the will and get proper advice.

gettingtheresometime

The way I read it was that the OP had 50% and the stepdad had 50% of the family home but the stepdad had the right to stay in the house for as long as he wanted. (there's a similar situation in my family)


Stepdad has now moved out and the OP wants to buy Stepdad's 50% so that they own the house completely.


Where I get confused is why the OP remortgaged with a BTL mortgage and on what property that BTL was on

G_M

gettingtheresometime wrote: »

The way I read it was that the OP had 50% and the stepdad had 50% of the family home but the stepdad had the right to stay in the house for as long as he wanted.

Ah! you may be right.

unforeseen

If the step dad owned 50% then there was really no point in a lifetime interest. OP could easily spend the value of his 50% in trying to force a sell, so a non starter.

xylophone

My question is what is the best way to approach this situation ? I have a bit experience before with my first home and when my mam died we transferred the deeds to my name and I remortgaged it into BTL and paid him off as my original mortgage payment was actually against there house.

Refers to post 1

https://forums.moneysavingexpert.com/discussion/comment/57619559#Comment_57619559