Paying dad's care costs

Dave215

My Dad lives in England and moved to a care home and is rapidly running out of money. He does own two properties, one is his old house that is a leasehold and is currently empty (he is not allowed to rent it under the terms of the lease). The other is a small house in Bradford bought 2 years ago for £54k that earns him £400 a month rent. I have lasting power of attorney. 

We had been told by a dementia charity, two social workers and the person I spoke to in leeds city council financial care department that we could apply for deferred payments until he sold his house. I asked all of these people if we needed to sell his rental and they all said it was best to sell his main house first and keep getting income. 

We have now been declined a deferred payment as he has over 23k of assets from his house in Bradford and i was just told he needs to pay with that property. Nice idea but I doubt it can be sold in 3 months when he'll run out of money.

I spoke to a company about equity release but was told it is only for people living in their own home and they can't do anything if it is empty. 

Does anyone have any idea how he can borrow any money from somewhere until a house is sold as we're really beginning to panic now. He cannot live on his own as he is incontinent, recently had a fall and has no idea who he or anyone else is.  I have no space at mine other than a sofa and i work away usually every other week.

Mojisola

Dave215 said:

We have now been declined a deferred payment as he has over 23k of assets from his house in Bradford and i was just told he needs to pay with that property.

You need to go back to the council.

The whole point of a deferred payment scheme is to tide you over until the house is sold - it doesn't matter to the council or the care home which property is sold as long as the loan can be paid back and then payments to the home covered.

It does make sense to keep the rented property so that the rent can go towards his bills.

Added: as an example - I was Dad's POA and I arranged a deferred payment scheme with the council.  Dad died before the house was sold and I repaid the council as his executor when the purchase finally went through.

tacpot12

You could sell the house at auction. This would get you the money within three months, but you might only realise a fraction of the value of the house. The other thing to do is try to sell it via a conventional route,  but make it clear that if exchange of contract hasn't taken place by the time of the auction it will be sold at auction. Any buyer who has made and offer and try to get to exchange can go to the auction.  

Pennylane

You pay interest on a deferred payment.  

Sounds to me from what you say that your Dad is declining and could be eligible for NHS Continuing HealthCare which means the NHS will pay for his care. He stays where he is but they pick up the tab.

Can I recommend a site called Care To Be Different.  If he is declining fast then you can ask for Fast Track application and it’s usually sorted within a week.  I got this for my late Mum who paid approx £100,000 in care home fees and had to sell her home.  I managed to get NHS CHC for the last 3 months of her life. 

Sorry your Dad is so poorly, know how it feels. 

Here you go 

https://caretobedifferent.co.uk/

Keep_pedalling

The empty property will be easier to sell than the one with a sitting tenant, unless the remaining lease is a short one, but neither are likely to sell before his money runs out so I don’t see how the LA can refuse a deferred payment when he has no liquid assets. 

Don’t panic, they can’t force you to pay from your own resources. Get his home on the market ASAP. Do you have an idea of it’s value and how long it would pay for his care?

Dave215

Keep_pedalling said:

The empty property will be easier to sell than the one with a sitting tenant, unless the remaining lease is a short one, but neither are likely to sell before his money runs out so I don’t see how the LA can refuse a deferred payment when he has no liquid assets. 

Don’t panic, they can’t force you to pay from your own resources. Get his home on the market ASAP. Do you have an idea of it’s value and how long it would pay for his care?

His main house is part of a retirement village. It has a very high management fee (as he has access to a few acres of gardens, a gym and a swimming pool), it also has a bizarre lease where only the leaseholder can sell the property for the first year.  They have put it up for 210k but it is not on the internet anywhere as they claim people will come directly to them and that older people don't use the internet (absolute nonsense I know). It's been up for sale for 5 months with zero interest.  The tenanted house cost 54k two years ago.  He is currently losing about 3k a month (care costs - pensions and rent). 

tacpot12

I don't know the details of the lease, but I am surprised that only the Retirement Village owners can advertise the property for sale and that they can set the price. Have your or a solicitor checked this? 

Anyway, when your Dad can't pay their very high management fees they will have to drop the  price if they want to sell the property to get back the fee arrears. It seems likely that quite a bit of the value of the house will go back to the freeholder to clear the arrears. This is a salutory tale for anyone considering buying such a property.

The fact that the house is in a Retirement Village and will have conditions on who can occupy it will mean that it is very unlikely to sell via an auction. Not impossible, but highly unlikely. 

Keep_pedalling

Dave215 said:

Keep_pedalling said:

The empty property will be easier to sell than the one with a sitting tenant, unless the remaining lease is a short one, but neither are likely to sell before his money runs out so I don’t see how the LA can refuse a deferred payment when he has no liquid assets. 

Don’t panic, they can’t force you to pay from your own resources. Get his home on the market ASAP. Do you have an idea of it’s value and how long it would pay for his care?

His main house is part of a retirement village. It has a very high management fee (as he has access to a few acres of gardens, a gym and a swimming pool), it also has a bizarre lease where only the leaseholder can sell the property for the first year.  They have put it up for 210k but it is not on the internet anywhere as they claim people will come directly to them and that older people don't use the internet (absolute nonsense I know). It's been up for sale for 5 months with zero interest.  The tenanted house cost 54k two years ago.  He is currently losing about 3k a month (care costs - pensions and rent). 

Oh dear, those places are very hard to sell as they are aimed at a narrow market and as you have found come with very restrictive covenants and high service charges. This may also be the reason the LA want to secure their debt against his freehold property not his retirement home.

I think you need to look at selling the other property as well. It has a sitting tenant but the return looks good, so it might not be a too difficult sale to a BTL buyer. You will get better advice on this on the housing board.

Dave215

Keep_pedalling said:

Dave215 said:

Keep_pedalling said:

The empty property will be easier to sell than the one with a sitting tenant, unless the remaining lease is a short one, but neither are likely to sell before his money runs out so I don’t see how the LA can refuse a deferred payment when he has no liquid assets. 

Don’t panic, they can’t force you to pay from your own resources. Get his home on the market ASAP. Do you have an idea of it’s value and how long it would pay for his care?

His main house is part of a retirement village. It has a very high management fee (as he has access to a few acres of gardens, a gym and a swimming pool), it also has a bizarre lease where only the leaseholder can sell the property for the first year.  They have put it up for 210k but it is not on the internet anywhere as they claim people will come directly to them and that older people don't use the internet (absolute nonsense I know). It's been up for sale for 5 months with zero interest.  The tenanted house cost 54k two years ago.  He is currently losing about 3k a month (care costs - pensions and rent). 

Oh dear, those places are very hard to sell as they are aimed at a narrow market and as you have found come with very restrictive covenants and high service charges. This may also be the reason the LA want to secure their debt against his freehold property not his retirement home.

I think you need to look at selling the other property as well. It has a sitting tenant but the return looks good, so it might not be a too difficult sale to a BTL buyer. You will get better advice on this on the housing board.

The LA authority will only secure a debt against his old house (so the leasehold). However, as he has 2 properties they won't secure the debt at all. They have stated they cannot provide any help.


I will put the freehold up for sale but it's highly unlikely he'll have it sold and money in his account in three months. As far as I can work out the council attitude is he can live on the streets until his second property is sold.  I am utterly desperate, and hoping there is some other way he can borrow money from somewhere. 

Dave215

Mojisola said:

Dave215 said:

We have now been declined a deferred payment as he has over 23k of assets from his house in Bradford and i was just told he needs to pay with that property.

You need to go back to the council.

The whole point of a deferred payment scheme is to tide you over until the house is sold - it doesn't matter to the council or the care home which property is sold as long as the loan can be paid back and then payments to the home covered.

It does make sense to keep the rented property so that the rent can go towards his bills.

Added: as an example - I was Dad's POA and I arranged a deferred payment scheme with the council.  Dad died before the house was sold and I repaid the council as his executor when the purchase finally went through.

The fact he owns two homes mean the council will not help.  I had not realised this, mainly as so many people told me it was best to keep the rental.  It does say on gov website that if you own property (other than the house you lived in before going into care) it counts as assets and if that is over 23k you are not entitled to help.

I'm sure someone else must have been in this situation and if we hadn't consistently been given poor advice we would have sold it by now.

Pennylane

Dave … did you read my earlier post?