Please help - parents

babyblade41

Slithery wrote: »

If you aren't going to evict them if they fall behind on their rent then it's a contrived tenancy.

Also if you're even contemplating becoming a landlord make sure that you read the following link, and all of the links that it contains before making any decisions. It's nowhere as easy as you may think.
Tenancies in Eng/Wales: Guides for landlords and tenants

The fact that you want to let to family doesn't change any of your legal obligations as a landlord, unless of course it's a contrived tenancy...

I evicted a very close family member from court to bailiffs... it aint nice at all

elsien

J123321 wrote: »

Hi, thanks for your reply.

They are both under the state pention age and don't have a private pension.

My father has always worked as a fisherman but can't due to health. Mum has never worked but been a housewife. They have never claimed benefits I tip now.

They have had broadband etc cut off. But the council is now paying heating and CT etc but not mortgage.

They wouldn't take on a lodger, or consider moving. I know it may be stubborn but they were days away from being evicted before I cleared the arrears.

I would most likely get a loan to pay the 25k off and then sign the house into my name.

I. Have read up on contrived tenancy but I think I would have a fair argument as I would be using the HB money to pay off the loan. Not sure though so valid point that needs looking into further.

If they're not prepared to help themselves then why do they think it's ok for you to bail them out?
I understand it's their home, but my concern wouid be if they're still doing an ostrich impression about their situation then they're likely to continue to struggle financially.
My suggestion before you do anything is to see if they will sit down, do a full financial breakdown and check their options. With stepchange or similar if they don't want to do it with you.

parkrunner

I believe it would be a contrived tenancy as they have the option of SMI. Also if your father can't work due to ill health than he should be receiving a benefit for that. The fact that your mother has never worked doesn't mean she shouldn't now. By all means help them out if you wish but don't expect any help from HB.

kazwookie

Sorry to say this ,but your parents need to wake up, big time.

You need to sort out what they owe to whom.

They need to sell up or as already stated end up with nothing.

00ec25

your desire to help your parents is of course admirable

your desire that the house be put into your name is a very bad idea given you already own somewhere else.

you would be liable to Capital Gains tax on the property when it is sold after they are dead. Of you were not the owner, you would likely inherit the property totally tax free.

OK the o/s mortgage is only 25k, but if you pay more than 40K to them (incl the value of that o/s mortgage) you will have to pay SDLT at +3%

your options are:
a) give them enough money every month to pay their mortgage with and get nothing back in return until the die. At which point you get your inheritance, ie the property

or

b) pay off the 25k and wait for them to die so you get the house then (hoping in the meantime it does not need to be sold to fund their care)

or

c) put the property in your name and pay the extra tax that will entail.

Cakeguts

J123321 wrote: »

Hi,


My parents are in financial difficulty. they were £8,500 behind on mortgage payments. I have now cleared the arrears.


there house is worth approx 130K with around 25K left on the mortgage. They have started receiving benefits but the benefits office wont pay the mortgage which is fair enough.


They have asked if I can buy the house from them. I guess my options are as follows.


1 - Buy it from them with them effectively gifting me the difference from market value 130K to outstanding 25K
2 - Pay off the mortgage and get them to sign the house over to me and them continue living there.


Is there any implications of this? In an ideal world I would charge them rent that is paid by the benefits office to pay for the loan I would take out to pay for the rest of the house but im sure there is implications on this.


They don't want to sell as they have lived there for years.

You probably won't like what I am going to say here but you can't actually help them.



If they had been open to change they would have got themselves out of this mess. £8000 odd in arrears on a £25k mortgage means that they haven't paid the mortgage for years. This hasn't been going on for 6 months or so.


I know you want to help your parents but I don't think it is reasonable of them to involve you in the worry and stress of this situation. In fact they really should not have told you at all because it puts you in a difficult position. They have done nothing it seems to help themselves except contact you so that now their problem becomes yours as well. This is unfair of them.



People get ill it is a fact of life and if that happens then you have to make alternative arrangements. It is time your parents got their act together and decided what they are going to do next. Just saying that they don't want to move and expecting other people to bail them out is not fair on the other people.



If you do this and you lose your job or become ill how are you going to be able to pay their mortgage and your own? With a normal buy to let if something goes wrong and you can no longer afford it you can sell it but you won't be in that position. If you can't pay both your mortgage and theirs you could find that your home could be repossessed as well as theirs.

tlc678910

If you can lend your parents 25k to pay off the mortgage (perhaps through a remortgage of your own property or a loan) get a charge registered against their property to protect your money. Then if the property was sold (for example to pay for care) you would get your money back. If you have siblings you can be paid back before any inheritance.

Your parents giving you 105k of equity to then claim housing benefit sounds extremely dodgy to say the least and I would hope would be classed as benefit fraud.

Tlc

HampshireH

I cannot see how your parents will be able to claim any benefits to pay you rent.

However (and you won't like this because no one would) your parents are being incredibly selfish and self centred.

It's ok for you to have more financial commitments because they chose not to meet their own obligations? What happens if later down the line you cannot sell the house or you need the money but have to pay out so much more in tax?

Your parents have made big life choices which go against their standard of living. Your mother has never worked.....really? In this day and age that is crazy. How did they think they would survive when your dad became ill? Anyone (and I mean anyone) can get a job these days if they choose to.

Choosing not to work to rely on benefits or family is in my opinion lazy. (Health issues are a different matter altogether but you don't allude to this).

They dont want to move,. they dont want to get a lodger and they don't earn enough money to pay the bills & this seems to have been going on for a very long time, but they are quite happy for you to do it all for them. Something vey wrong with this scenario.

In 2015 they borrowed money to give you £4k deposit for your house. Was that paid back? Or do they still owe this money too?

LandyAndy

Cakeguts wrote: »

If they had been open to change they would have got themselves out of this mess. £8000 odd in arrears on a £25k mortgage means that they haven't paid the mortgage for years. This hasn't been going on for 6 months or so.


.

Not necessarily. In three years time my mortgage will be £25k and £8k would be slightly less than 4 months repayments

xylophone

They are both under the state pention age and don't have a private pension.

They should both get a state pension forecast. You could print off the forms?

https://www.gov.uk/government/publications/application-for-a-state-pension-statement

Are you in a position to lend them £25,000? If so, you could do this and take a first charge on the property.

It would be possible for you to have a loan agreement drawn up which covered rolling up the interest or one which gave you a specific share of the proceeds when the house sold.

Either of these options could have tax (income or CGT) implications for you eventually.

Or you could make the mortgage repayments for them and have this set up as a loan, repayable when the house was sold - your solicitor could draw up a formal agreement.

If your father is too ill to work, has he looked into the benefits that might be available to him?

I gather that the employment situation in Cornwall can be difficult but is there nothing at all available for your mother?