Charging order on late mums property

greatcrested

It would help if you gave a rough overview

* value of Estate

* value of property for probate

* value of mortgage

* value of CCJ

* value any other Estate debts

* whether you are Beneficiary/joint beneficiary - why you are buying

* IHT liability if any and whether paid (or how to be paid)

????

and this is a duplicate thread? Really?

AnotherJoe

Yes you would need £42k to buy it because the creditors will need paying off otherwise the purchase literally cannot go ahead.

I urge you to get your siblings to sign *something* acknowledging they are happy to relinquish their share, and get those signed and witnessed. And they may as well be worded as Deed of Variation in that case. But if that seems too much of a faff PLEASE get them to sign something and get them to have it witnessed (two people, names and addresses, dates)

Otherwise, you are technically committing fraud because as the executor you are legally liable to distribute in accordance with the law. 

kris80

AnotherJoe said:

kris80 said:

I have applied for letters of administration. So does that mean I need to have a mortgage for the value still owed and the loan values?

Yes it does. The folks who replied in your other thread clearly stated that and i think you posted you were getting a bigger mortgage to cover the loans (and this pay them off) as well?

As said by those other folks you need also to get an agreement from your siblings they are happy for you to inherit the house. This could be done with a deed of variation or they could probably just write letters to you preferably signed and witnessed. What you dont want is you have a bust up in a few years time and then they complain you didnt distribute the estate properly.

To avoid it sounding like you dont trust them (and potentially cause a bust up ! ) i suggest you tell them (and this is true) that this so  you can show you did your duties as an executor properly.And you might want to have a solicitor do this via deed of variation. Will cost a few hundred quid but could save thousands down the line.

Finally, my commiserations.

Thank you. I know I have a few different threads because they are issue for different categories so I thought I’d have to put my many many questions separate. This is so, so stressful and I want it all to be over. The advice from everyone here has been beyond words and has really help me to understand more so thank you everyone I must sound really stupid but I just want to get it right.

AdrianC

kris80 said:

The value of mums property is around £95,000. I am looking to buy it for what’s currently owed on the mortgage which is 32,000. The loan chargers are £10,000 so am thinking I need a mortgage for £42,000. Letters of administration hasn’t been issued yet. There is no inheritance tax to pay. I have lived at the property all my life so it’s my home where my family now live.

Does the estate have any other assets?
Assuming not, then the assets of the estate are £95k - liabilities of £42k. The value of the estate is £53k. If you want to retain the house, you will need to inject £42k cash into the estate in order to settle those liabilities. Yes, a mortgage against the property is the easiest way to do that, if you can get one given your poor credit record.

I presume there's no will. How many people are due to inherit under intestacy laws?
https://www.gov.uk/inherits-someone-dies-without-will

Assuming there are two siblings then each is due £53k/3 = ~£17,650. I presume the others are happy to forego their share to reduce the amount you have to inject into the estate to retain the house? Because otherwise, you're going to have to find their share(s), if you wish to buy the property from your mother's estate.

Given you are in overall debt, though, it may be wise to get a larger mortgage (if possible), and pay your debts off - or accept that you cannot currently afford to buy the house. Your creditors could force the sale of the house.

kris80

AdrianC said:

kris80 said:

The value of mums property is around £95,000. I am looking to buy it for what’s currently owed on the mortgage which is 32,000. The loan chargers are £10,000 so am thinking I need a mortgage for £42,000. Letters of administration hasn’t been issued yet. There is no inheritance tax to pay. I have lived at the property all my life so it’s my home where my family now live.

Does the estate have any other assets?
Assuming not, then the assets of the estate are £95k - liabilities of £42k. The value of the estate is £53k. If you want to retain the house, you will need to inject £42k cash into the estate in order to settle those liabilities. Yes, a mortgage against the property is the easiest way to do that, if you can get one given your poor credit record.

I presume there's no will. How many people are due to inherit under intestacy laws?
https://www.gov.uk/inherits-someone-dies-without-will

Assuming there are two siblings then each is due £53k/3 = ~£17,650. I presume the others are happy to forego their share to reduce the amount you have to inject into the estate to retain the house? Because otherwise, you're going to have to find their share(s), if you wish to buy the property from your mother's estate.

Given you are in overall debt, though, it may be wise to get a larger mortgage (if possible), and pay your debts off - or accept that you cannot currently afford to buy the house. Your creditors could force the sale of the house.

Yes I do have other siblings who are willing to wait a year or 2 until I can get a better mortgage. The siblings are not wanting straight divide as they know that I’ve paid for up keep and alterations in the house ie conservatory, garden, kitchen etc
I have a mortgage in principle but with the current situation they not moving forward as of yet. The chargers on mums property are also the 2 ccjs I have so these will then appear satisfied.

[Deleted User]

You really do need to get an agreement from the other inheriting siblings what proportion of the house price they want back NOW.  Things can change.., one wrong word and everyone can change their mind, and if there is nothing in writing, disagree with the vague idea of what they expect with no notice at all. 
How were the charges placed on your mother's house?  Her financial affairs and yours were separate matters unless your name was on the deeds.You living there does not give you automatic rights over the house.

To me, its sounds like things have been handled quite haphazardly in a legal sense so you are leaving yourself wide open to all sorts of complications later on.  Getting a mortgage now, before things have been agreed may not be the wisest thing..  

steampowered

As an executor of the estate, you are responsible for ensuring that the estate settles all of its debts, BEFORE any distribution is made to beneficiaries.

 This includes all credit cards, overdrafts and CCJs - regardless of whether there is a charging order in place or not.

If you transfer the house to yourself at an undervalue without paying your late mother's creditors, you will likely find yourself liable for repaying those debts.

In terms of your siblings, you are trying to buy a house worth £95k for £42k. That's an undervalue of £53k - i.e. £53k which in legal terms should be split with your siblings equally.

In other words - your siblings would have to gift you their share of the inheritance. For example if there are 3 of you, then out of the £53k equity, each sibling should get a share worth £17.6k. If the siblings agree to let you have their £17.6k share that's fine; but you must have their permission (strongly advised to get it confirmed in writing if there is any risk that the siblings might come along and ask for their £17.6k later).

[Deleted User]

Im still failing to understand how a charge against your MOTHER’S house could have been for a CCJ owed by you ? That doesnt make sense 

kris80

Densol said:

Im still failing to understand how a charge against your MOTHER’S house could have been for a CCJ owed by you ? That doesnt make sense 

My mum was the guarantor of my loan but we split the loan.

Linton

kris80 said:

The value of mums property is around £95,000. I am looking to buy it for what’s currently owed on the mortgage which is 32,000. The loan chargers are £10,000 so am thinking I need a mortgage for £42,000. Letters of administration hasn’t been issued yet. There is no inheritance tax to pay. I have lived at the property all my life so it’s my home where my family now live.

The way to look at it to avoid confusion is that if the value of the property is £95000 you buy it for £95000, £10K goes to pay off the loan and £32K goes to pay off the mortgage leaving £53K to the estate which is distributed to the beneficiaries as specified in the will.   Any money you get as a beneficiary can be offset against the amount you pay for the house.  So if you inherit £53K or more then yes you can cover the net costs with a £42K (or less) mortgage.

You may need to be careful to ensure that the transactions happen at the right time so that the estate does have the money to pay off the debts when or before the assets are distributed or I guess you may need a bridging loan.