Will Execution Impasse.

doodling

What should happen is roughly:

1. Equity release company repossesses the property and sells it.
2. The equity release company gives to the executor (the solicitor in this case) any money left over once the loan has been repaid and the repossession costs and selling costs have been deducted.
3. The executor then divides up that money, plus any other assets, minus their costs, according to the will.

There should be a step 2a where the executor takes the repossession costs (but not the sale costs) incurred by the equity release company and adds those back onto the amount available to be divided up, and a step 3a where the executor subtracts the repossession costs from the amount being paid to D.  This means that D pays for the additional costs incurred due to his unwillingness to leave.  You need to ask the executor whether they will be doing that, and if not, why not.  A problem arises if that would leave D with a negative amount of money - in theory he could be sued for the remainder but that doesn't help if he doesn't have it.

xylophone

The executor remains the executor whatever action the ER company chooses to take.

Is your sibling medically diagnosed as having a mental disorder and so can be regarded as a vulnerable person?

xylophone

Does this change things in anyway in connection with a looming repossession order?

Only in the way that any eviction would be handled?

Does your sibling understand that an eviction order is likely to be sought?

RetSol

It's what happens after that that I'm interested in if the money is not paid back by that time.

The way I think that it goes is like this.   Any conveyancers out there, feel free to correct me. 

The repayment date for the debt is potentially the trigger for enforcement of the lender's charge (mortgage) over the property. Ie if, after that date the debt has not been repaid, the lender can enter into possession and sell the property as is the case with any mortgage.  If the property is occupied, the lender needs a court order in order to enter into possession and sell it.  Having obtained the order, the lender is the legal owner of the property. 

Therefore, If the debt is not paid on time,  the estate is potentially looking at a mortgagee's sale.  The mortgagee sells the property, deducts the outstanding debt and costs from the proceeds and pays the balance to the estate for distribution by the executors according to the terms of the will.

This is not ideal from the beneficiaries' point of view as all the lender is interested in is repayment of the debt plus costs, not in getting the best price for the property.  The lender does not have to consider the interests of the beneficiaries.  There are also other possible outcomes, eg the lender may choose not to enforce the order if D eventually moves out. 

The executors' hands are tied at the moment as D is occupying the property. 

I think that @AgitatedCat is wise to try to get a handle on the situation as it is still possible to avoid an outcome which is not in anyone’s interests, Including D's. 

I assume, as the solicitors are acting as executors, that they do not consider that the estate is likely to be insolvent. 

xylophone

I would imagine that the solicitor could approach the court  for an order for sale/ eviction.

https://elselaw.co.uk/can-a-family-member-live-in-a-deceaseds-property-while-waiting-for-probate/#:~:text=If they will not leave,that they are a trespasser.

RetSol

My question is this: wouldn't it be just as possible to obtain said court order by a solicitor? And wouldn't this avoid potential losses associated with passing it to the equity release company to do it?

This is a good question.  In principle, it seems to me that the executors could seek an order for possession against the occupier - @xylophone's link above sets out the position very clearly although it does not deal with the situation of a family member who has been living in the property prior to the death of the testator.  It may be that an occupier in such a case has a claim to a potential right of occupation of the property. 

On this Forum, there are a lot of threads concerning properties under probate which are occupied by a family member who is reluctant to move out.  It does not seem to be common for executors to consider possession proceedings in these cases.  One reason may be that the situation generally resolves itself and, given that it takes time to obtain an order and there are costs involved, it is not worth it.  The occupier in many cases will see the writing on the wall eventually - they just need time to sort themselves out in the wake of the testator's (generally the parent's) death. 

Another reason is that it is not great for family relationships going forward.  In addition, a period of 6-12 months to sort things out is pretty standard in the world of probate and some estates take much longer to administer than that.  The threads on this Forum also tend to concern instances where the testator's death is fairly recent and the poster is coming to terms with the problem with the first time.  We don't tend to hear about what happens 18+ months down the line.

Ironically, it is possible that by obtaining an order for possession against D, the executors may be doing him a favour.  If there is a possibility of him being housed by the local authority, he may be in a better position to obtain housing through them if he is evicted than if he leaves the property voluntarily.  Different authorities have different policies on this.

I suggest that you probe the executors as to why they are doing what they are doing.  I don't know whether you can engage with D or his support.  It may be that by understanding and laying out the realities of the situation the parties can find a way through.  

xylophone

You are saying that your brother (although he has a mental illness), perfectly understands that his father's will left the proceeds of the sale of the property (after repayment of the mortgage) to his aunt and to him and his two siblings.

He has substantial savings and could well afford to buy a property of his own.

In view of his condition, the local authority has twice offered him a rental property but he has turned down the offers.

Despite the above, he is obdurate in his refusal to co-operate with the executor in selling the property so that the debt and the bequests can be satisfied.

Under these circumstances, it seems to me that a court could well grant an order for sale and even costs against your brother which would need to be set against his share of the inheritance?

RAS

I wouldn't mention his savings to the social services but I do think it might be appropriate to do so to the solicitor. If your brother isn't making co-operating they need to have a fuller understanding of the situation.

Has he been aggressive towards them?

RetSol

I wouldn't mention his savings to the social services but I do think it might be appropriate to do so to the solicitor. If your brother isn't making co-operating they need to have a fuller understanding of the situation.

I think that it is important for all concerned to understand the situation fully.  Do social services/local authority know about the equity release loan on the property and that D is, in effect, prejudicing himself financially by remaining in the property?  

wilfred30

RAS said:

I wouldn't mention his savings to the social services but I do think it might be appropriate to do so to the solicitor. If your brother isn't making co-operating they need to have a fuller understanding of the situation.

Has he been aggressive towards them?

I would.  It's not right that he is being offered social housing if he has a six figure sum in the bank plus however much he will get in inheritance.  He can easily afford to either buy or rent privately.