Debt cautions against inherited property

twinklybongle

My late partner died several years ago, I am his sole beneficiary and executor. His only asset is the house which, at time of death, was registered to him and his previous partner (they were not married, she pre-deceased him, and she did not leave a will)) as tenants in common. The Land Registry documents still state their two names, the name of the mortgage company, and the fact that there are two cautions against the property dating back to 1992.

I know that, at the time of my late partner's death, the family of his previous partner did not want to apply for Letters of Administration because she may have had substantial debts of her own. I also had debts at the time, so nothing was done. I have lived in the property for more than 20 years, I have paid the interest on the mortgage for all that time. and have now paid off my own debts, so I would like to register my interest in the property.

But will I be opening a can of worms by doing this? Can I find out the details of the cautions without being forced to pay the debt until the property is sold? What happens if the debt has accrued interest since 1992 and is more than the equity?

I don't actually want to sell the property, it's my home. The interest-only mortgage term expired four years ago, it's still in the names of the two deceased, I just keep paying the interest each month. I'm able to pay off the capital (about a third of the overall value of property), but if I do this, will the cautions have to be dealt with?

Can the family of the previous partner force the sale of the house at any time?

Do I have any rights as a sitting tenant or even as a squatter?

Over the last 12 years, advice from everyone has been "do nothing and hope for the best" but I don't want this hanging over me, and the mortgage company won't hold off for ever.

Sorry, this is a long post, it may well be in the wrong section of the Forum, and there are lots of questions, any advice would be welcome.

I

TonyMMM

twinklybongle wrote: »

My late partner died several years ago, I am his sole beneficiary and executor.

Can you just clarify that he did leave a will naming you as executor and if he did have you applied for probate ?

Assuming he did, then it appears that you will have inherited his share of the house but that the other share belongs to whoever would have inherited from his ex-partner under the intestacy rules at the time of her death.

Have you told the mortgage company about either of the deaths ? As executor this would be one of your responsibilities in dealing with your partner's estate.

This sounds like a very complex situation that you need proper advice on - as your partner's executor, you may need to apply to administer his ex-partners estate as well (if no-one else ever did) to try and sort things out.

You need to see a solicitor.

Keep_pedalling

Blimey, that is some mess. At some point the mortgage company will call in that dept, so by not paying it off now, you are just kicking the can down the road a bit putting off the enevitable, but put of that bedtime belongs to who ever owns the other half of the house, so paying it would also be fraught with problems.

I think you really need to take professional advice here. In your shoes I really would not know where to start, but I guess sorting out the ownership of your partner's previous partner portion of the house is the first priority.

getmore4less

Probably worth untangling the mess or at least staring to collect the information so you can proceed at a later date.

at some point you will need full legal advice but the more information you collect the cheaper that advice will be and over time it tends to get harder to get facts so documenting ASAP helps even if you do nothing now.


The property as TIC with late partner(A) and later partners previous partner(B)

To deal with that on a legal level will need death certificate for B and a grant of administration for A

This will allow the transfer of the legal title to new people.

The beneficial interest is a bit more complicated

one scenario.

At the date of death of B(intestate) their beneficial interest fell into the estate of B.
That beneficial interest would have been(unless something else documents different) 1/2 the equity(not 1/2 the house).

how that beneficial interest moves forward in time can be a number of ways but as a share of the property is one option.

The remainder would belong to A along with the mortgage debt.

On the death of A you became the beneficial owner of A's share of the property but until that estate is administered it will be hard to do anything as you need the grant to deal with the legal title.

How difficult is it going to be to administer the estate of A?
By the looks of it anything relating to the house(utilities etc) were taken over so that leaves other assets/debts/pensions etc to sort out.

If A's estate putting the house aside was solvent it will be worth dealing with that and establishing your legal and beneficial interest in the property.

It won't need B estate to be administered BUT there will be the lingering beneficial interest to sort out.

One thing worth doing will be getting estimates of the property values at the key dates to establish the potential equity of A&B at those points.


As a lot(maybe all) of the debts will be statute barred anyway presumably you would know of any communication for A as they would have come to the house you live in.

twinklybongle

Thank you for all your replies and thoughts. i have already received preliminary advice from two solicitors, but at this stage, as getmore4less points out, it's "Probably worth untangling the mess or at least staring to collect the information so you can proceed at a later date".

So I suppose I'm at the collecting information stage. My late partner did leave a will, in which I'm named as sole beneficiary and executor. I have not applied for probate. I have his death certificate, I also have a copy of the ex-partners death certificate. At the time of his death, I informed the mortgage company and his name is no longer registered on the mortgage, however the deceased ex-partners name still is (the account number has remained the same), maybe because her relatives knew they could not afford the interest repayments or the repayment the capital, or maybe they don't even know of its existence.

The debt cautions against the property are in my late partner's name, does anyone know if I can find out what these debts are without being forced to repay them until I'm ready, would this be "intermeddling" ( a phrase I have learnt from these boards today)? I have paid the monthly interest on the mortgage by cheque each month for 20 years, without a murmur from the mortgage company, but could this be seen as intermeddling?

My late partner had no other debts apart from the mortgage and the cautions, and no other assets or pension etc. All the utility bills etc have always been in my name. I have also covered all the maintenance costs.

As I understand it, legally my partner's ex-partners family are entitled to half the equity. Full stop. I want to get in to a position whereby I can effectively buy them out, but if they were aware of changes to the ownership of the property, for example if i paid off the mortgage capital, could they force the sale of the property without my permission or knowledge?

It is complicated, and it's worrying me sick, and I know I need professional advice, but I'm really grateful for all the advice so far, I'm hoping that someone may have some thoughts or ideas that, in twelve years, no-one else has come up with.

TBagpuss

How much is the equity, and how much is outstanding on the mortgage?

The ex-partner's family could apply to force a sale of the house, they / the court would need to establish what their interest in the house was.
I *think* that this would still be 50% of the equity, given that the mortgage is an interest only one, (so you don't have to work out how much you've paid off the capital of the mortgage - they've effectively left their 50% of the equity invested in the house so it increases in line with the value of the house)

So one thing to consider is whether you have a mortgage capacity in your own right - would it be possible for you to get a mortgage to buy out the estate's interest?

twinklybongle

Ye,s I would be able to, and would have to, get a mortgage to buy out the estate's interest, but I think that's too far down the line at the moment, It's not going to be worth it if the cautions against the property have been incurring interest. I think that's my starting point, to find out about the cautions, and I don't know how to do that, or if I can be forced to pay those cautions without selling the property.

It probably would be the least worst option to let sleeping dogs lie at the moment, as I have done all this time, but I need to have plans in place if the mortgage company call in the capital, which could happen at any moment seeing as it's 4 years overdue.

Johnhowell

A couple of points to consider:


What was the split for the Tenants in Common? It may not be 50/50.


You mention your partner died a several years ago - is there not a requirement to apply for probate within a certain period of time after death?


All the best of luck.

getmore4less

The beneficial interest for this other persons estate should not be 1/2 the current equity, it should be based on the beneficial interest at the time the died.

silvercar

You need to fully understand the cautions.

Cautions are charging orders registered when the property is first registered. This thread will be useful, if long, reading:

https://forums.moneysavingexpert.com/discussion/1839539

Yorkshireman99

All very well but could the LR representative confirm this please?