Leaving Over 60s flat owned jointly to common heir

littlerock

It is too complicated to describe here in detail, but if my sister and her male partner bought a flat for "Over 60s" as an investment, owning it as tenants in common, and each made a will leaving it to the same much younger relative, what would happen when one of them died?

I assume the deceased's share would go to the heir who would then own it jointly in common with the survivor. When the second person died, if this was the remaining older partner, then the heir would inherit the whole property?. Would they be able to live there or, being under 60, would they have to sell it?

da_rule

Would depend on the exact terms imposed on the property ownership. Some prohibit the property being owned by someone under 60, some simply prohibit the property being occupied by someone under 60 (sometimes a younger occupant is allowed where they are the partner of someone over 60).

[Deleted User]

It maybe that the heirs don't want this flat, retirement flats can be a poisoned chalice, taking years to sell and the owners have to pay extortionate service charges whilst it sells.

AdrianC

When you say they bought the flat "as an investment", will they be living there themselves, or letting it out?

I find it very difficult to believe it would be a good investment, given the well-known resale issues BBH mentions.

Exodi

BBH123 wrote: »

It maybe that the heirs don't want this flat, retirement flats can be a poisoned chalice, taking years to sell and the owners have to pay extortionate service charges whilst it sells.

And the realisation in the future when the heir has found a partner, scraped together every penny and is looking to buy their first house together that they owe Stamp Duty.

Also, I assume this isn't that company selling houses on Rightmove at ~40% discount but owns the house when the owners pass? I forget the name of it... EDIT: Homewise!

AnotherJoe

littlerock wrote: »

It is too complicated to describe here in detail, but if my sister and her male partner bought a flat for "Over 60s" as an investment, they would be crazy but carry on .... owning it as tenants in common, and each made a will leaving it to the same much younger relative, what would happen when one of them died?

I assume the deceased's share would go to the heir who would then own it jointly in common with the survivor. When the second person died, if this was the remaining older partner, then the heir would inherit the whole property?
Well yes of course. Why the "?" ?

Would they be able to live there or, being under 60, would they have to sell it?

I very much doubt the lease would permit someone under 60 living there or it wouldnt be an over 60's flat, otherwise over 60's could buy them and then let them out to all and sundry.

They could of course leave it empty, or presumably let it out, depending what the lease conditions are but if this couple are buying it "as an investment" i guess that means they will be letting it out?

lisyloo

BBH123 wrote: »

It maybe that the heirs don't want this flat, retirement flats can be a poisoned chalice, taking years to sell and the owners have to pay extortionate service charges whilst it sells.

Not all of them are terrible .
I recently sold one that went for full asking price 2 days before going to market.
The service charges were not extortionate for what was included (this one had a facilities manager, lift, communal lounge, communal laundry, gardens etc.).
Of course one has to pay for management and professional upkeep which is more expensive than say doing your gardening, but many of the residents are past doing their own DIY and gardening.

Personally I can’t see how they’d make a good investment and the service charges need to be paid whilst empty (being sold) and there are charges when selling for sales packs and fee from both managing agents and landlords but they are not all rip-offs. I don’t think ours was too bad at all. The service charges were around £3.5k but with quite a lot included (like maintained call system) which for some people is essential to stay in their own homes.

They are rented out sometimes but I’m not sure how they make a good investment.

I would say that if you are leaving one of these to someone you need to think about who is going to pay the service charges and any additional upkeep in the interim especially if it may be a long time (second death?) until it is sold.

eddddy

I'm not sure that I'd agree with a lot of the comments here.

As with any leasehold property, when you buy a property on a retirement development...

• You need to make sure you buy at a 'realistic price (taking into account service charges)

• And you need to expect to sell at a 'realistic price' (taking into account service charges)

As with any property...

• If you overpay at the outset, you may not get back what you paid

• If you overprice when you want to sell, you probably won't get a sale

• If the lease gets short, that may reduce the value and/or make it difficult to sell (as with all leasehold property).

• If you buy a newbuild from the developer, you might be paying a premium

Here are some example of 'sold prices' for 3 random Retirement Developments. I found them from random searches on Rightmove. The prices seem to have increased over the years.

(I don't know the areas, so I don't know if they've done better or worse that 'non-retirement' properties.) :

https://www.rightmove.co.uk/house-prices/SL7-3TZ.html
https://www.rightmove.co.uk/house-prices/PO12-2LX.html
https://www.rightmove.co.uk/house-prices/CV21-3PF.html

Larac

We are in the process of selling my late Mum's retirement flat. The buyers in this complex, one has to be 60+ and over and partner 55+. Age checks are carried out as part of the process - ie producing passport during the buying process. This has taken nearly 18 months to sell as there were 7 in the complex and there is a limited audience. Meanwhile the 'estate' continues to pay the management charges. Full CT comes into play after 6 months and at 18 months double CT is payable and then it just goes on.. As others said these flats can be a poison chalice. Once the value has been taken out of them - is the time to purchase. Never buy these as 'new build' and I personally can't see these as an investment as once the 'value' is taken out them, the price seems static.

retirementmove

I am a specialist EA selling retirement property - usually anyone can own the property but the resident must meet the required age restriction - often 55+ or 60+