Retirement Apartment - not sold Dad’s house yet

silvercar

user1977 said:

silvercar said:

You would have thought that retirement builders would have plans in place to assist in these sorts of situations. Would putting a charge on the property satisfy the builders? At least that would guarantee them their money once the sale happens.

If they're relaxed about not having any security over the money in a bank account, surely they'd be as happy knowing that he owns a house (easy to prove) and that he's actively trying to sell it (also easy to prove). What's the risk? He still hasn't sold it years in the future? He sells it and fritters away the proceeds (which he could just as easily do with the cash in the bank)?

That is why I suggest they take a charge over the property, so they know they will be paid out when it does sell.

lisyloo

user1977 said:

lisyloo said:

user1977 said:

silvercar said:

You would have thought that retirement builders would have plans in place to assist in these sorts of situations. Would putting a charge on the property satisfy the builders? At least that would guarantee them their money once the sale happens.

If they're relaxed about not having any security over the money in a bank account, surely they'd be as happy knowing that he owns a house (easy to prove) and that he's actively trying to sell it (also easy to prove). What's the risk? He still hasn't sold it years in the future? He sells it and fritters away the proceeds (which he could just as easily do with the cash in the bank)?

Well clearly they aren't as happy knowing that or there wouldn't be an issue.
One risk is that there proves to be some sort of issue e.g. subsidence or that it just doesn't sell.
How do you prove that someone is actively selling it and not sabotaging deals?
The risk is they have a 90 year old they can't shift who isn't paying the bills.

All properties can be sold, even something fit only for demolition is likely to have the bulk of its value in the land. We're into the realms of particularly obscure risks if the property isn't really worth anywhere near what it appears to be, or the owner prefers to be in major debt for his rent and risk eviction, rather than bother selling the house to cover the costs.

So how do they know it would be sold in a timely fashion?
What control does the builder have? (I think it's very little and a lot of hassle).

user1977

lisyloo said:

user1977 said:

lisyloo said:

user1977 said:

silvercar said:

You would have thought that retirement builders would have plans in place to assist in these sorts of situations. Would putting a charge on the property satisfy the builders? At least that would guarantee them their money once the sale happens.

If they're relaxed about not having any security over the money in a bank account, surely they'd be as happy knowing that he owns a house (easy to prove) and that he's actively trying to sell it (also easy to prove). What's the risk? He still hasn't sold it years in the future? He sells it and fritters away the proceeds (which he could just as easily do with the cash in the bank)?

Well clearly they aren't as happy knowing that or there wouldn't be an issue.
One risk is that there proves to be some sort of issue e.g. subsidence or that it just doesn't sell.
How do you prove that someone is actively selling it and not sabotaging deals?
The risk is they have a 90 year old they can't shift who isn't paying the bills.

All properties can be sold, even something fit only for demolition is likely to have the bulk of its value in the land. We're into the realms of particularly obscure risks if the property isn't really worth anywhere near what it appears to be, or the owner prefers to be in major debt for his rent and risk eviction, rather than bother selling the house to cover the costs.

What control does the builder have? (I think it's very little and a lot of hassle).

Very little, but no less than they do over the cash in the bank. There doesn't seem to be a great deal of logic in their approach - at some point landlords do need to take on some risk, though I understand the optics of them evicting elderly tenants aren't great.

GDB2222

lisyloo said:

GDB2222 said:

lisyloo said:

Bolt1234 said:

This is 10 years worth!  

yes everyone agrees it's a lot, but you have no rights to insist they reprice their pricing or perception of the risk.
Either buy somewhere in a chain, or get a loan from the bank or look somewhere else with better terms.

Why not buy rather than rent?

There are a load of expenses involved in buying a place like this. SDLT is just the start. Some companies take a percentage of the sale proceeds. The OP would have the job of finding a buyer, which is not at all easy. There have been loads of threads about retirement properties sitting on the market for years, with service charges having to be paid. 

Good points, but it does depend on exactly what you buy.
A lot of 1 beds will be below the stamp duty limit.
Our parents had very low transactional costs (the estate agents and moving costs are there if you move into rented).

it's not at all easy selling a mccarthy and stone (and their ilk) property, but there are some that are better, but is the selling a priority for him in his position?
I've sold one and it went very quickly for asking price.
if it's one with more reasonable charges then there will be a demand in future.
He'll have released enough to see him through a few years in a nursing home and if it were me I'd want my Dad to do what was best for him not his beneficiaries.

I was just responding to your suggestion of buying, rather than renting. 

First, I suggest you read this:

'My flat was £161,950 in 2007 – now I'm offered just £28,000'

"Cross blames what he describes as the “punitive” service charge on the one-bed flat. Last year the charge was £562 every month – equal to £6,744 a year, although this year it dropped back to £519 a month. On top of that, the ground rent is a further £415 a year. In other words, a retired person could be paying nearly all their state pension in service and ground rent charges."

https://www.theguardian.com/money/2019/nov/16/flat-retirement-builder-value-mccarthy-stone

Second, re SDLT, the OP was talking about London. McCarthy and Stone are offering a one bedder at £385k, which is well within SDLT territory. 
https://www.mccarthyandstone.co.uk/retirement-properties-for-sale/randolph-house-harrow/

Third "but is the selling a priority for him in his position?" The difficulties you acknowledged certainly explain why he might prefer to rent. I'm very pleased you succeeded in off-loading your one quickly, but sadly most people don't seem to have that experience. 



 

lisyloo

I understand the issue with the Mccarthy & stone & their ilk with very expensive service charges.
If you buy a more traditional one with lower more reasonable service charges (like the one I sold) then you are less likely to have this issue on resale.

BUT what is in him best interests??

Prioritising the resale value for the beneficiaries may not be in his best interest and may even be counter to his best interests.

Bolt1234

I need the property near to me and I live in a very expensive part of the UK.  Not London btw. 

lisyloo

Have you considered a joint property such as a granny annexe.
There are issues with this e.g. what happens if you have all the upheaval and then he dies (sadly it does happen).

it's something I've thought about for my Dad and has big advantages i.e. he can live independently but with support.
There are major issues though e.g. the upheaval for everyone else.

Just wondering if you'd considered it - partly because there might be something I've not thought of.
I'd be interested in your thoughts on it.

Bolt1234

No.  I wouldnt have a parent living in a granny annexe. My husband isnt in the best of health and whilst all is Ok at present we know the next few years are going to be very touch.  

lisyloo

Just wanting to add I was consider the granny annexe thing and my Dad just passed away x

Brie

lisyloo said:

Just wanting to add I was consider the granny annexe thing and my Dad just passed away x

sorry for your loss @lisyloo