Peppercorn agreement

jemima82

I think OP has been clear in the question - they & sister are to use money from the estate to buy a house (which they will own and father’s partner will live in). 

AdrianC

jemima82 said:

I think OP has been clear in the question - they & sister are to use money from the estate to buy a house (which they will own and father’s partner will live in). 

But a will simply cannot legally force them to do that.

It can ask them to. But that's not the same thing.
I suspect that it'd struggle to even make a bequest dependent upon it, though.

A will simply cannot make any legally enforceable stipulations on what people do with money the will leaves them. It cannot say "You MUST buy a house, and then you MUST do this and that with it.". It carries zero legal weight for that. All it can do is say "this bit of my money goes to X, this bit to Y".

If that was the deceased's wishes, then the deceased should have left a property in trust for the benefit of the person in question, with ownership passing from the trust to the beneficiaries on the death of that person.

jemima82

AdrianC said:

jemima82 said:

I think OP has been clear in the question - they & sister are to use money from the estate to buy a house (which they will own and father’s partner will live in). 

But a will simply cannot legally force them to do that.

It can ask them to. But that's not the same thing.
I suspect that it'd struggle to even make a bequest dependent upon it, though.

A will simply cannot make any legally enforceable stipulations on what people do with money the will leaves them. It cannot say "You MUST buy a house, and then you MUST do this and that with it.". It carries zero legal weight for that. All it can do is say "this bit of my money goes to X, this bit to Y".

If that was the deceased's wishes, then the deceased should have left a property in trust for the benefit of the person in question, with ownership passing from the trust to the beneficiaries on the death of that person.

AdrianC said:

jemima82 said:

I think OP has been clear in the question - they & sister are to use money from the estate to buy a house (which they will own and father’s partner will live in). 

But a will simply cannot legally force them to do that.

It can ask them to. But that's not the same thing.
I suspect that it'd struggle to even make a bequest dependent upon it, though.

A will simply cannot make any legally enforceable stipulations on what people do with money the will leaves them. It cannot say "You MUST buy a house, and then you MUST do this and that with it.". It carries zero legal weight for that. All it can do is say "this bit of my money goes to X, this bit to Y".

If that was the deceased's wishes, then the deceased should have left a property in trust for the benefit of the person in question, with ownership passing from the trust to the beneficiaries on the death of that person.

Thanks Adrian 😊

so if we set aside what the deceased ‘should’ have done, as it’s a moot point...perhaps it’s not legally binding but we could assume that OP is following their father’s wishes happily. No need for legal enforcement. My point was that some replies give the impression that OP hasn’t been clear enough about the situation, which is only background noise anyway. The question was related to help for the peppercorn agreement.

thanks for your reply, I am (genuinely) honoured to have interacted with you as I know you’re a good contributor to this forum!

frogglet

jemima82 said:

I think OP has been clear in the question - they & sister are to use money from the estate to buy a house (which they will own and father’s partner will live in). 

She actually says they are buying a house FOR the estate.

jemima82

Ok, I see your point! I guess I just read it differently...as in ‘doing something related to the estate as executors’ or suchlike 👍

DayDreamerandGeneralWaster

I read it the way @jemima82 read it. The will has been written in such a way to free up some of the inheritance whilst ensuring that the surviving partner is cared for. It doesn't matter what can and can't be enforced, the OP is upholding those wishes.

K_potts

Thanks all for the help. For information my enquiry was only about the peppercorn agreement but I do appreciate many of you have a vast knowledge of experience and probably only want to help a lay person not make a legal mistake.
I don’t really want to go into the complexities of the will but it was drawn up by a solicitor and based on this and our clear knowledge of my father’s wishes we are endeavouring to uphold them.
Sorry to bite at the first poster it was quite harsh, however, it does seem sometimes you ask an innocent specific question and that people jump down your throat about something else.

AdrianC

jemima82 said:

so if we set aside what the deceased ‘should’ have done, as it’s a moot point...perhaps it’s not legally binding but we could assume that OP is following their father’s wishes happily.

Then the OP can do whatever they wish to do, and can set the tenancy (for it is one) up however they wish - or, rather, however they think their father would have wished - and the will itself is irrelevant. The fact the will was set up by a solicitor makes no real difference - plenty of solicitors have drawn up terrible, unenforceable wills in their time...

So, on that basis...

OP - how do YOU want to set it up?
What do YOU want in terms of maintenance provisions?
What do YOU want in terms of right of come-back if they do not keep up the maintenance and insurance, or if you find they are subletting?
What if you predecease the tenant?
What if the tenant requires residential care?
What if their physical health demands adaptations - or a different property?
What if you hit financial troubles, and your creditors require you to sell the asset to settle your debts?
What if either you or your sister fall out with each other or the tenant?

The tenant cannot use the property as collateral on a loan, any more than any other tenant can use their landlord's property - they simply do not have title to the property to place as security.

Of course, this all supposes that this really is the OP and sister buying the property to own, and not the will setting up a trust...

Keep_pedalling

I find it odd that this would be done without a life interest trust being set up by the will. If that was not done then surely it can be done using a deed of variation, providing the death did not occur more than 2 years ago. This would avoid all this rubbish about peppercorn rents and landlord responsibilities. It would also avoid the issue of CGT when the house is eventually sold.

if the solicitor you are using is the same one who drafted the will I would look for another one.

TBagpuss

OP, talk to the solicitor, however, the sorts of things you may want to include are:
- maintenance - sometimes it is appropriate to distinguish between decorative repairs / normal upkeep (occupant's responsibility) and any structural repairs (may be owner's responsibility), and also to define what it required - possible by reference to maintaining the property in the condition it is at the outset, for instance.
- access - arrangements for you to have access to the property if necessary for any repairs , inspections etc.
- anything she can't do - e.g. subletting, but also issues about whether she could move a long term guest in - for instance if she acquired a new partner or if she needed a live-in carer. - in agreements arising from a divorce or separation you sometimes see provisions which mean someone loses their right to occupy (or loses their right to occupy for free) if they have another person living in the house for more than 6 months in total in any rolling 12 month period, for instance, which might be relevant if you would want her / any new partner to pay rent if she started to cohabit, and I am sure could be worded to allow you to give consent should a live in carer be needed 
- think about what happens if she needs to move - can she request that you sell this property and buy another to be help on similar terms (for instance if she needed an accessible property, or wanted to move to live nearer family?)
- provisions allowing you to end the agreement if she is no longer living there - e.g. if she has to go into long term care, or if she moved in with family or a new partner - again, this might be on the basis that the arrangement is terminated if she ceases to occupy as her primary home for x months.
- depending on the intent and the wording of the will, any other situation where you would want to be able to end the arrangement?