Inherited property worries

Deenport

 have inherited a 1/4 share of family home. Probate is almost finalised. The property is mortgage free but has a Repayment Charge against it as it is an ex council flat and building repairs were carried out 3 years ago and my parents were liable for a share of the cost. Unable to pay, they agreed a repayment plan with the council for approx £28k but have since both died. Payments are to be made annually for the next 28 years. Having no way of paying the debt, all beneficiaries agree that selling the property to pay off the charge is the way forward. My question is this, if it takes a long time to sell the flat, will I have shared liability to meet the yearly payments? And if when the flat sells at a loss and we cannot clear the charge fully, are we liable for any shortfall? 

Thanks 

unforeseen

The obvious answer is for the estate to sell it and any payments then come out of the sale price before the money is split. 

Deenport

unforeseen said:

The obvious answer is for the estate to sell it and any payments then come out of the sale price before the money is split. 

Thank you, this is the intention, however the flat is not within a desirable area and we think it will be very difficult to sell, especially in the current Covid climate. My question is more around will the council chase us for debt if say the flat isn’t sold within a year or so? 

Deenport

unforeseen said:

The obvious answer is for the estate to sell it and any payments then come out of the sale price before the money is split. 

Sorry have just read your comment again and realised my error. The executor and solicitor don’t seem to be doing that, they winding up estate and transferring property for us to decide

Brynsam

lorsferg said:

My question is this, if it takes a long time to sell the flat, will I have shared liability to meet the yearly payments? And if when the flat sells at a loss and we cannot clear the charge fully, are we liable for any shortfall? 

unforeseen said:

The obvious answer is for the estate to sell it and any payments then come out of the sale price before the money is split. 

Obvious answer is yes, but OP's concern is the length of time it might take to sell. 

OP - you need to look carefully at the agreement with the council. It won't be the first time this situation has arisen, so if necessary check with them what would happen. If you are seen to be making genuine attempts to sell the property at a realistic price, it is highly likely the council would take any sort of enforcement action.

If the flat sells at a loss and you can't clear the charge, and there are no other assets in the estate, then you are looking at an insolvent estate and the remaining debt dies with your parents. Just remember you can't distribute any estate assets to the beneficiaries until you are sure all debts are settled.

getmore4less

UP for sale at offers over £(the amount left on the charge)

What's it worth very low ball estimate?

Who are the executors

the beneficiaries should tell them to sell the property as you won't accept the transfer,  they should be sorting out the debt not passing it onto you.

if there is not much money at stake you could just decline all your inheritance or just the house.  

Deenport

getmore4less said:

UP for sale at offers over £(the amount left on the charge)

What's it worth very low ball estimate?

Who are the executors

the beneficiaries should tell them to sell the property as you won't accept the transfer,  they should be sorting out the debt not passing it onto you.

if there is not much money at stake you could just decline all your inheritance or just the house.  

Hi
Unfortunately one of my brothers is the executor and has mismanaged money left by parents. He managed to add his name to bank accounts prior to death and has kept money that was left. I am not chasing this as the stress and upset caused would be too much but if I don’t accept inheritance then part of my share would go to him and that is too much to swallow. There is a solicitor but northern they or my brother ( executor) will tell us anything and I am concerned that by accepting my share I will be accepting liability for debt. It seems that as it is a repayment charge on the flat, it’s not a debt as such to be paid from estate?? I’m not really sure what is going on but think my brother is doing everything he can to hold onto the cash he got his hands on. Can’t afford to get a solicitor and don’t want the stress of it all but neither do I want my brother to have my share and my other brother still lives in the property and don’t want to see him homeless either. 

It’s such a mess caused by greed and badly written will

JGB1955

You could always gift your share to the brother who lives in the property....

Deenport

JGB1955 said:

You could always gift your share to the brother who lives in the property....

Hi we looked into this and we need a deed of variation which although can be as simple as a letter, if not written correctly can be rejected. Need a solicitor to write this and I worry that if this one brother owns 50% then he is liable for 50% of debt! Nothing is ever simple, if the council won’t chase, or debt is paid before inheritance is shared out then I can do this. I just don’t want the share, or the money, but have to be careful not to make any costly mistakes through ignorance 

Mojisola

lorsferg said:

The property is mortgage free but has a Repayment Charge against it as it is an ex council flat and building repairs were carried out 3 years ago and my parents were liable for a share of the cost. Unable to pay, they agreed a repayment plan with the council for approx £28k but have since both died. Payments are to be made annually for the next 28 years. Having no way of paying the debt, all beneficiaries agree that selling the property to pay off the charge is the way forward. My question is this, if it takes a long time to sell the flat, will I have shared liability to meet the yearly payments? And if when the flat sells at a loss and we cannot clear the charge fully, are we liable for any shortfall?

It's the estate that owes the money to the council.

The property should be sold by the executors and the debt repaid.

If there is any money left, that will be divided between the beneficiaries.

If the flat sale doesn't raise enough to pay off the debt and there are no other assets in the estate, the council loses out and the beneficiaries inherit nothing.

Deenport

Mojisola said:

lorsferg said:

The property is mortgage free but has a Repayment Charge against it as it is an ex council flat and building repairs were carried out 3 years ago and my parents were liable for a share of the cost. Unable to pay, they agreed a repayment plan with the council for approx £28k but have since both died. Payments are to be made annually for the next 28 years. Having no way of paying the debt, all beneficiaries agree that selling the property to pay off the charge is the way forward. My question is this, if it takes a long time to sell the flat, will I have shared liability to meet the yearly payments? And if when the flat sells at a loss and we cannot clear the charge fully, are we liable for any shortfall?

It's the estate that owes the money to the council.

The property should be sold by the executors and the debt repaid.

If there is any money left, that will be divided between the beneficiaries.

If the flat sale doesn't raise enough to pay off the debt and there are no other assets in the estate, the council loses out and the beneficiaries inherit nothing.

Mojisola said:

lorsferg said:

The property is mortgage free but has a Repayment Charge against it as it is an ex council flat and building repairs were carried out 3 years ago and my parents were liable for a share of the cost. Unable to pay, they agreed a repayment plan with the council for approx £28k but have since both died. Payments are to be made annually for the next 28 years. Having no way of paying the debt, all beneficiaries agree that selling the property to pay off the charge is the way forward. My question is this, if it takes a long time to sell the flat, will I have shared liability to meet the yearly payments? And if when the flat sells at a loss and we cannot clear the charge fully, are we liable for any shortfall?

It's the estate that owes the money to the council.

The property should be sold by the executors and the debt repaid.

If there is any money left, that will be divided between the beneficiaries.

If the flat sale doesn't raise enough to pay off the debt and there are no other assets in the estate, the council loses out and the beneficiaries inherit nothing.

Thank you. This is what I initially thought but when I called solicitor dealing with estate, although she wouldn’t say very much, she did say that what we did with the flat once it’s ours is up to us which suggests that it will be transferred over with the payment charge in place, much like inheriting a flat with an outstanding mortgage and beneficiary decides to either get a new mortgage to pay off existing one or sell