Lending money to in-law to purchase their council house

[Deleted User]

So my mother in law who is 70 has asked me to lend her £30,000 so that she can purchase her council house, she has stated that she will be able to pay all the money back within 10 years.

She has lived in the property for over 50 years and has cared for her son who is 41 years old all his life as he is disabled. She wants him to stay living in the property to which her daughter will move in once she has passed away to look after him.

Now, I am happy to lend the money if I know I will definitely get my money back as I have saved this money up over a number of years and I will need it back for my own future.

As this will be purchase from the council under the help to buy scheme, what sort of agreement can I do so that under all circumstances so that I will get my money back. For example, if I was to separate from her son or if she passed away? It will be a loan but can I set that loan against the property so that the house has to be sold should I not get my money back? Or could the house be sold back for the same price to the council so that I get my money back should anything go wrong. I have no intention of inheriting or having the house for myself.

I need some legal assurance and wondered if anything can be done under this circumstance?

Thanks in Advance, Jayne

Lioness_Twinkletoes

Question is...what will you do if it's not paid back? I mean, you could put a charge on the property but in order to recover your funds you'd have to force a sale. Are you going to do that when there is a disabled man who will be made homeless?

Your MIL is better off staying as a Council tenant. She has far greater security as does her son on her death.

NB: The property would be sold under Right to Buy, not Help to Buy

Doozergirl

Lioness_Twinkletoes wrote: »

Question is...what will you do if it's not paid back? I mean, you could put a charge on the property but in order to recover your funds you'd have to force a sale. Are you going to do that when there is a disabled man who will be made homeless?

Your MIL is better off staying as a Council tenant. She has far greater security as does her son on her death.

NB: The property would be sold under Right to Buy, not Help to Buy

I agree. You're putting yourself into a potential family conflict.

MIL and her son have security of tenure and affordable housing. Presumably his rent will be covered in the future by the government. If the son does need residential care, then in social housing is the best place for him to be moved in a timely manner. Sister can move in to become his carer if necessary.

There's no actual change for the better that you create and there could be an almighty family row as a result of actually lending it, if MIL doesn't pay it back, dies before paying it back, you split up with your H or you simply need your own money back. You'd have to force a sale, making someone homeless. You will be the baddie.

It's unecessary for you to do as asked.

If a mainstream lender won't lend, what makes your security over the property stronger? I'll tell you for free that the answer is nothing, and that emotions and families weaken your chances of seeing that money.

10 years is a long time. And £30k is a lot to lend to a retiree who can only pay £250 a month. If you can afford to lose it, lend it. Isn't that the saying?

csgohan4

Is the son on the tenancy? That's the simplest way to ensure his future

babyblade41

As in all these type of situations I have yet to know it ended well ... for everyones well being don't do it,

In this case it's totally unnecessary and to keep things as they are would be a far better situation long term than what MIL would like to do.

Lending money to family or friends you would have to know that it will probably be a gift and to ever get it back a bonus

Norman_Castle

She has lived in the property for over 50 years and has cared for her son who is 41 years old all his life as he is disabled. She wants him to stay living in the property to which her daughter will move in once she has passed away to look after him.

If the son is on the tenancy he should be able to remain in the property depending on succession rights. Explain the situation to the council and ask if he can remain after her death.

AnotherJoe

Work with your MIL to sort out the best way to assure ongoing tenancy for the disabled son. It may be already the situation that he can take on the tenancy after her death or she leaves.

GibbsRule_No3

Does the MiL need to live a certain number of years after buying the council house? There was mention of the daughter moving back to the house after MiL dies to look after her brother, would this be allowed if the MiL dies with in a certain time after the house has been purchased? A friend of mine lost her father last year and still lives in the council house with her mother, 40 + never lived anywhere else but with her parents,( they are not buying the house) but she was not allowed to be put on the tenancy, perhaps the son might not be able to either, hence the need to buy. Will the daughter and son have money to pay you back if the MiL dies before paying you back if they do buy the house and there are no penalties?

TBagpuss

I agree with others that the first step should be looking at whther Son can simply be added to the tenancy, so that it is in joint names and he would then suceed when his mum dies.

If she were to buy the property then it could result in *less* security for him - what if she becomes ill and needs care? Or if she can't repay you so you need to push for the money to be repaid?

Plus, if she buys the house and leaves it to her son this might affect his entitlement to benfits in the future, as well as meaning that he would become responsioble for maintaining the property.

If she is dtermined to go ahead, then you and she would both need to take legal advice separately.

It is possible to have a private mrtage, where a charge is registered againstthe property in your favour, but you need to bear in mind that that means that if she doesn't pay you back, your remedyu is to reposess abd force a sale. Would you fo that? Would your relatinships with thefamily survive if you did?

hazyjo

TBagpuss wrote: »

Plus, if she buys the house and leaves it to her son this might affect his entitlement to benfits in the future, as well as meaning that he would become responsioble for maintaining the property.

This would mainly be my concern too. How is he going to afford maintenance, etc? And what if she lives to 100? How will she afford it?


Is his disability something that might get worse or cause premature death? (Sorry, trying to be practical here.) He may need specialist care rather than care at home.


Agree with the others - it has disaster written all over it.

-taff

They don't usually add children to tenancies, only patners or spouses.
If he has been living with her since he was a child before a certain date [ sometime in the eighties I think] then he will be able to stay on a s a new tenant.
I wouldn't be lending any money to anyone of her age because you have no idea how she's going to pay it back and you want it paid back.

If you can't lose it, don't lend it.