Using an inheritance to buy a council flat via "right to buy" for someone on benefits

CharlieC2210

Jude57 said:

user1977 said:

Inigo_Montoya said:

davilown said:

Giving her a secure home for the rest of her life would be a good idea.  Has the inheritance already been put into a trust though? Is it written in the will to be in Trust or is it cash that she has inherited that you want to put in trust? If the latter, it may significantly affect any benefits she may be entitled to. 
Best to check with a specialist to give you sound legal advice 

As far as ongoing charges & possible liabilities for flat / block repairs goes that would be disclosed during the Right to Buy process 

Only insofar as any works are currently contemplated though - she'd need to take the risk of any future costs.

Warning: Long post ahead!

Just to give some insight into potential future works, I live in a flat in a block. I rent from a Housing Association which was formerly a Council landlord.

In the years between 2009 and now, the following have been carried out to my flat to meet the standard required by law, so weren't by my choice, and all flats whether owned or rented had to have the works done. I know my HA got court orders to force at least two owners to permit entry for the works or safety assessments to be done:

New windows (it's a 14 storey block so major works)
New central heating boiler and extra radiators
Replacement of gas fire with electric including new fire surround and mantelpiece
Partial rewire including new consumer unit
New bathroom including tiling, flooring and decorating
New kitchen including tiling, flooring and decorating
New hard wired smoke alarm
New hard wired carbon monoxide monitor
New fire resistant front door to flat
New hard wired security alarm
New video entry panel/communication panel
Testing for asbestos
Installation of cavity wall insulation

Works to the communal areas include:

New aerial on roof which feeds in to all flats
New door entry system
Refurbishment of foyer including new flooring
Rewire of whole block
Upgrade of smoke/fire alarm system
2 new lifts
Refurbishment of all landings including new fire resistant doors to stairwells, dropped ceilings, new lighting and flooring
Testing and removal of asbestos
Installation of cavity wall insulation
New roof to entrance to block foyer
Regular painting of interior and exterior

Then there's the usual recurring things like:

Regular maintenance of landscaping
Cleaning communal areas
Window cleaning
Gas safety checks
Electrical safety checks

In addition, I've had a level access shower installed because of mobility issues.

If I had bought my flat, those works would have still had to be done and I would have had to pay a proportion of the cost, likely many tens of thousands of pounds. As it is, I pay my rent but everything above and probably more I've forgotten, has been at no additional cost to me.

Repairs are not something I need to worry about and as long as I remain a good tenant, I can't be evicted. If I ever need supported accommodation, my HA has that, too, although they will fund further adaptations to help me stay in my present home.

TL:DR I wouldn't want to lose all the positives of my secure tenancy for the real risks of an owner of a flat in a block. Of course, if I win the Lottery it would be different but for now, I realise how lucky I am to have my secure tenancy.

Hello, Jude. Even if those repairs cost as much as £50,000, the OP's sister would still be up £34,000 on the deal given that she is eligible for the full discount of £84,000. As an earlier poster said, for most people eligible for the full discount an RTB purchase is a no-brainer.

Alderbank

Who hopes to inherit the OP's sister's estate when she dies?

markin

Owners are getting hit with bills of £100-250K, Some blocks are even getting torn down on people.

Will the cladding soon need ripping off. 

Morglin

DLA is not affected by working/not, income or assets, so she can't have been on that.

Any means tested benefit is affected by income/savings, but DLA is non means tested.

TBagpuss

OP, equity in your home is not counted as 'savings' for the purpose of means tested benefits although it can be relevant if someone requires care and moves into a care home 

Whether it is in you relatives interests would depend on whether the inheritance would cover the full cost of buying the property or whether she would need a mortgage as well, and then on whether she will be able (both financially and in terms of organising / managing it ) to deal with and cover the costs of ongoing maintenance and repairs, including her share of maintenance and service costs for the block as a whole, which could be substantial. 

What is the advantage to her of owning rather than renting, especially if her rent is currently covered by benefits? 

If the inheritance would men that he trust still has significant assets even after advancing the money to buy the flat then it may be a good choice, once she has owned for 5+ years she would have the option of selling and moving elsewhere if she wanted to , so it could give her more flexibility in the future BUT she needs to be clear about the ongoing costs of being a homeowner, especially in a block of flats where you are typically legally liable for your share of costs relating to the building as a whole, unlike with a house where you can (up to a point) decide for yourself when and whether to spend money on it!) 

user1977

The original query was from over a year ago, I suspect things may have moved on.

Jude57

CharlieC2210 said:

Jude57 said:

user1977 said:

Inigo_Montoya said:

davilown said:

Giving her a secure home for the rest of her life would be a good idea.  Has the inheritance already been put into a trust though? Is it written in the will to be in Trust or is it cash that she has inherited that you want to put in trust? If the latter, it may significantly affect any benefits she may be entitled to. 
Best to check with a specialist to give you sound legal advice 

As far as ongoing charges & possible liabilities for flat / block repairs goes that would be disclosed during the Right to Buy process 

Only insofar as any works are currently contemplated though - she'd need to take the risk of any future costs.

Warning: Long post ahead!

Just to give some insight into potential future works, I live in a flat in a block. I rent from a Housing Association which was formerly a Council landlord.

In the years between 2009 and now, the following have been carried out to my flat to meet the standard required by law, so weren't by my choice, and all flats whether owned or rented had to have the works done. I know my HA got court orders to force at least two owners to permit entry for the works or safety assessments to be done:

New windows (it's a 14 storey block so major works)
New central heating boiler and extra radiators
Replacement of gas fire with electric including new fire surround and mantelpiece
Partial rewire including new consumer unit
New bathroom including tiling, flooring and decorating
New kitchen including tiling, flooring and decorating
New hard wired smoke alarm
New hard wired carbon monoxide monitor
New fire resistant front door to flat
New hard wired security alarm
New video entry panel/communication panel
Testing for asbestos
Installation of cavity wall insulation

Works to the communal areas include:

New aerial on roof which feeds in to all flats
New door entry system
Refurbishment of foyer including new flooring
Rewire of whole block
Upgrade of smoke/fire alarm system
2 new lifts
Refurbishment of all landings including new fire resistant doors to stairwells, dropped ceilings, new lighting and flooring
Testing and removal of asbestos
Installation of cavity wall insulation
New roof to entrance to block foyer
Regular painting of interior and exterior

Then there's the usual recurring things like:

Regular maintenance of landscaping
Cleaning communal areas
Window cleaning
Gas safety checks
Electrical safety checks

In addition, I've had a level access shower installed because of mobility issues.

If I had bought my flat, those works would have still had to be done and I would have had to pay a proportion of the cost, likely many tens of thousands of pounds. As it is, I pay my rent but everything above and probably more I've forgotten, has been at no additional cost to me.

Repairs are not something I need to worry about and as long as I remain a good tenant, I can't be evicted. If I ever need supported accommodation, my HA has that, too, although they will fund further adaptations to help me stay in my present home.

TL:DR I wouldn't want to lose all the positives of my secure tenancy for the real risks of an owner of a flat in a block. Of course, if I win the Lottery it would be different but for now, I realise how lucky I am to have my secure tenancy.

Hello, Jude. Even if those repairs cost as much as £50,000, the OP's sister would still be up £34,000 on the deal given that she is eligible for the full discount of £84,000. As an earlier poster said, for most people eligible for the full discount an RTB purchase is a no-brainer.

I'm afraid that's not true, at least it wouldn't have been for me. The windows alone were costing leaseholders just over £12,000 and that was in 2009. For large blocks like the one I live in, there's additional costs for any external works because of the scaffolding required to access the upper storeys and those costs are huge. The required new fire safe front doors to each flat cost leaseholders around £3,000 and the bill for the works to lifts and communal areas were in excess of £25,000 for leaseholders. Leaseholders can make repayment arrangements with the HA but not over a very long period. Any leaseholder refusing to pay will ultimately find a Charge placed against the property although my HA doesn't tend to push for forced sale. That £84,000 doesn't go very far against such capital works.

As far as I know, there are no such major works planned here in the immediate future but I've just today received notice that the electrical installation in the flats must be inspected and any remedial works scheduled. Again, at no additional cost to me but as it's a safety requirement, leaseholders will be billed for the inspection and any works the HA have to do to make their installations safe. There's an intention to replace the current gas central heating with ground source heat pumps within five years, again, at no additional cost to tenants but the capital works will be very expensive for leaseholders, certainly into tens of thousands. There's no opting out because the gas supply to the block will be disconnected. Irritating for me as the owner of a brand new gas cooker!

That £85,000 would be a lot of money if you have it nestled in a good interest earning account but it's a drop in the ocean of ongoing costs for homeowners.

housebuyer143

CharlieC2210 said:

Jude57 said:

user1977 said:

Inigo_Montoya said:

davilown said:

Giving her a secure home for the rest of her life would be a good idea.  Has the inheritance already been put into a trust though? Is it written in the will to be in Trust or is it cash that she has inherited that you want to put in trust? If the latter, it may significantly affect any benefits she may be entitled to. 
Best to check with a specialist to give you sound legal advice 

As far as ongoing charges & possible liabilities for flat / block repairs goes that would be disclosed during the Right to Buy process 

Only insofar as any works are currently contemplated though - she'd need to take the risk of any future costs.

Warning: Long post ahead!

Just to give some insight into potential future works, I live in a flat in a block. I rent from a Housing Association which was formerly a Council landlord.

In the years between 2009 and now, the following have been carried out to my flat to meet the standard required by law, so weren't by my choice, and all flats whether owned or rented had to have the works done. I know my HA got court orders to force at least two owners to permit entry for the works or safety assessments to be done:

New windows (it's a 14 storey block so major works)
New central heating boiler and extra radiators
Replacement of gas fire with electric including new fire surround and mantelpiece
Partial rewire including new consumer unit
New bathroom including tiling, flooring and decorating
New kitchen including tiling, flooring and decorating
New hard wired smoke alarm
New hard wired carbon monoxide monitor
New fire resistant front door to flat
New hard wired security alarm
New video entry panel/communication panel
Testing for asbestos
Installation of cavity wall insulation

Works to the communal areas include:

New aerial on roof which feeds in to all flats
New door entry system
Refurbishment of foyer including new flooring
Rewire of whole block
Upgrade of smoke/fire alarm system
2 new lifts
Refurbishment of all landings including new fire resistant doors to stairwells, dropped ceilings, new lighting and flooring
Testing and removal of asbestos
Installation of cavity wall insulation
New roof to entrance to block foyer
Regular painting of interior and exterior

Then there's the usual recurring things like:

Regular maintenance of landscaping
Cleaning communal areas
Window cleaning
Gas safety checks
Electrical safety checks

In addition, I've had a level access shower installed because of mobility issues.

If I had bought my flat, those works would have still had to be done and I would have had to pay a proportion of the cost, likely many tens of thousands of pounds. As it is, I pay my rent but everything above and probably more I've forgotten, has been at no additional cost to me.

Repairs are not something I need to worry about and as long as I remain a good tenant, I can't be evicted. If I ever need supported accommodation, my HA has that, too, although they will fund further adaptations to help me stay in my present home.

TL:DR I wouldn't want to lose all the positives of my secure tenancy for the real risks of an owner of a flat in a block. Of course, if I win the Lottery it would be different but for now, I realise how lucky I am to have my secure tenancy.

Hello, Jude. Even if those repairs cost as much as £50,000, the OP's sister would still be up £34,000 on the deal given that she is eligible for the full discount of £84,000. As an earlier poster said, for most people eligible for the full discount an RTB purchase is a no-brainer.

She's not up by anything she just has money to pass on when she is dead but needs to spend more while alive. 
A secure council house is probably worth having to minimise costs when on a low income.