Retirement Apartment - not sold Dad’s house yet

eddddy

I guess the company are being ultra-cautious, because they don't want to end up having to evict an elderly, frail, vulnerable person in 3 or 5 or 8 years time - because they're unable to pay the rent.

Obviously, just because the tenant has the money in their bank account today, doesn't mean it will still be in their bank account next year, next month or next week. But I guess it gives the company some level of comfort.

lisyloo

user1977 said:

Couple of thoughts:

What's the typical period tenants stay in such places before having to move on (one way or another)? Ten years' worth of rent in the bank does seem excessive.

Money in the bank isn't necessarily earmarked for the landlord! The tenant could spend it on blackjack and hookers as soon as the lease is signed.

I would agree that 10 years for a 90 year old sounds a lot, but as you say having the money in a bank account doesn't mean he can't spend it elsewhere so they have to take account of his other spending as well, although I think he'd be more likely to spend it on a recliner chairs, scooter etc. rather than your sugegstions :-)

Bottom line is that even though it seems a lot, they are entitled to make the rules on their own investments (assuming this is a private deal and nothing to do with any local authority).

Bolt1234

We are definitely renting.

The figure of £300k is not far off the amount requested!  

Who has that sort of money lying around and also putting it into an elderly person's bank account and then taking it out say a month later will I presume trigger inheritance tax implications.  What if the elderly person passed away whilst the money was still in their account and NO ONE has £300k lying around to be used for a box ticking exercise.  At the very least it will be in stocks and shares etc.

Or maybe people do??

We would plan to sell the house which is in London, then invest the money for the rest of their lives.  The interest from the house sale and their state and private pension will easily cover the rental costs.  

Bolt1234

Also when the house is sold who is to say the money then gets transferred out to something/someone else?  Its a tick box exercise.  

peterhjohnson

Bolt1234 said:

Hi,

 asking for the difference in Dad’s income and the retirement unit costs x 10 YEARS and not taking into account the sale of the house unless it has exchanged.

That's stupid. Once exchange has taken place, it's typically a week or two until he'd have to move out. Not enough time to organise rental of a retirement property I would have said.

Bolt1234

Quite Peter!  Where does the elderly person live whilst they are desperately trying to find somewhere (at 90!).  

GDB2222

sheramber said:

GDB2222 said:

I was just looking at McCarthy and Stone, as an example, and they do seem very expensive to me. Just under £3k per month to rent a one bedroom flat in Harrow. An ordinary one bed flat in the locality might be roughly half that. Of course, the block may have substantial communal facilities that an ordinary flat doesn’t have.

If dad’s income is just the state pension, the annual difference between income and rent  might be £30k, so dad is being asked to show say £300k in savings. That’s a bit daft if he is selling a £700k house.

Assisted living provides support such as  meals , domestic staff. laundry, shopping, on call staff tp help out . it is much more than re retirement flat or sheltered housing.

All that doesnl' come cheap.

I did look it up on their website, and the rent includes 1 hour a week of assistance. All the other services are probably available, but at extra cost, I think. 

However, I agree that my comment that they seem expensive is pretty unhelpful. If the services are enough to keep someone fairly independent, so they don't have to go into a home, it's money very well spent. 

Mrs_pbradley936

A few years ago a woman I used to play bridge with put herself in a very upscale nursing home and they wanted to see proof that she could pay for at least 3 years. She was 94 when she went in there and really with it mentally but fell over putting out the bins and couldn't get up so stayed there until the postman came hours later. Then she knew it was time for help. She was very well off and had no trouble proving it but the reason they want proof is because they are far more expensive than what the Council would pay if you ran out of funds. They do not want the bad publicity of throwing an old person out on their ear when the money runs out.

Bolt1234

This is 10 years worth!  

lisyloo

Bolt1234 said:

We are definitely renting.

The figure of £300k is not far off the amount requested!  

Who has that sort of money lying around and also putting it into an elderly person's bank account and then taking it out say a month later will I presume trigger inheritance tax implications.  What if the elderly person passed away whilst the money was still in their account and NO ONE has £300k lying around to be used for a box ticking exercise.  At the very least it will be in stocks and shares etc.

Or maybe people do??

We would plan to sell the house which is in London, then invest the money for the rest of their lives.  The interest from the house sale and their state and private pension will easily cover the rental costs.  

Presumably the offspring are in their 50's/60's? if your Dad is 90.
To answer the question, people of that age group wanting a comfortable retirement would have 5 or 6 figure sums in cash.
They don't put it all in long term investments in case the investments are down (e.g. like now) when they want to take their pension, so a couple of years worth at least is good, so they can live off it whilst were in recession.
Of course there may be no such individuals in your family - just answering your question and explaining that some early retirees or those approaching retirement do have decent cash sums.

But yes I agree, there are many pitfalls - death, failing health, failing mental health etc.

The point I was trying to make you see is that if you won't back your Dad or pay for a loan then why should they consider the risk to be insignificant?