Selling price of parents' house does not meet the equity release redemption figure

TheJP

theartfullodger said:

TheJP said:

The estate pays the difference. There is no work around, you owe what you owe I'm afraid. Condolences for your loss. 

Sorry for your losses.

And if there is no money left from mum and dad's estate then children, relations, friends of them don't have to pay. The ***** ******  dubious "equity release" will know this.  This won't be the first time a lender like them has lost out:  You do not owe anything.  (Is the cremation/burial/funeral paid for??)

Suggest you go have a chat about this with local Citizens advice - find them here.. 
https://www.citizensadvice.org.uk/about-us/contact-us/contact-us/search-for-your-local-citizens-advice/
(Use your post code rather than the property's one)

- plus maybe a local solicitors who might give a free 15 minute chat. 

What was the formal written agreement with the lender that covered you & brother selling  it please?  Did anyone use/rent/live in the place during the time since dad died, other than mum?

Best wishes and good luck.

Depends on whether one or both siblings were added to the deeds. Then they will owe the difference. Solicitors and EA would have been instructed by the OP so they will be liable for the costs if there is no monies left.

MEM62

MobileSaver said:

Dogletsmum said:

We have no money to pay for solicitors or estate agents fees which we were hoping would come out of the sale of the property. 

propertyrental said:

You do not owe anything. Your mother's estate owes the outstanding debt. ... They cannot come after you personally for the money,

That is normally the case but is that correct for the solicitor and estate agent fees as they will have been appointed by the executor/administrator?

This could turn into quite a mess as the executor should have checked the equity release figure much earlier and realised that there wasn't enough to pay all the bills and so declared the estate insolvent.

Now that they've already "intermeddled" they can't just walk away. Were there any other assets (bank accounts/shares/premium bonds etc.) and if so what happened to the money from those?

My thoughts exactly.  However, we may never know as the OP has not been back to answer the question or comment further.  

steampowered

Did your parents have other assets such as bank accounts, shares, saving accounts?

If so, you need to check your equity release documents carefully. Most equity release plans come with a "no negative equity" guarantee which means that their debt only comes from the property, but not the rest of the estate.

Solicitors would normally deduct their fees from the sale proceeds so you might have to do it that way.

I'd say it's much better to have a conversation with the equity release lender to work out what to do. That's much better than just trying to walk away and leave them to it, which opens you up to legal liability for mismanagement of the estate. As an executor you are responsible for managing the estate properly, you can't just walk away.

TBagpuss

steampowered said:

Did your parents have other assets such as bank accounts, shares, saving accounts?

If so, you need to check your equity release documents carefully. Most equity release plans come with a "no negative equity" guarantee which means that their debt only comes from the property, but not the rest of the estate.

Solicitors would normally deduct their fees from the sale proceeds so you might have to do it that way.

I'd say it's much better to have a conversation with the equity release lender to work out what to do. That's much better than just trying to walk away and leave them to it, which opens you up to legal liability for mismanagement of the estate. As an executor you are responsible for managing the estate properly, you can't just walk away.

The solicitors would only be able to do that if there were funds available. They can't just send less to the mortgage lender. The solicitors will have to give undertakings to the mortgage lender about the amounts to be paid to them, in order for the lender to release their charge over the property. So in practice, the solicitors will require money on account from OP and his brother to pay their fees.

Sarah1Mitty2

silvercar said:

Sorry for your loss.

The general advice in this situation is to walk away, let the equity release company deal with the sale etc after all you have nothing to gain.

I also thought that there was a legal requirement that the equity release amount owed couldn't be more than the value of the property.

They can`t predict future values and there is interest to pay on the released "equity", not helpful here but in general people should stay away from "equity release".

.https://www.moneysavingexpert.com/mortgages/equity-release/

DullGreyGuy

Dogletsmum said:

Hi, We are in a quandary as my parents took out equity release in 2003. My Dad died in 2007 and my Mum in 2021.  We (my brother and I) have only just managed to sell the house (well in the last stages of), but the equity release has been gathering interest in the meantime and the selling price does not cover what they want.  We have no money to pay for solicitors or estate agents fees which we were hoping would come out of the sale of the property.  Where do we stand, does anyone know?

Have you checked the terms of the equity release? Some are capped at market value of the property value whereas others can exceed it but then they only have a claim on the estate's assets not anyone elses.

If the executors have messed up and distributed assets or committed the estate to extra costs before realising its insolvent then thats a whole seperate set of questions

Dogletsmum

Thank you all for your answers.  I need to show them to my brother and discuss.  There is no other income from the estate as Mum went into care shortly before she died and what money she had (very little) paid for that.  Sorry for the late response too as I'm new to this forum and wasn't really sure how to respond.

silvercar

Dogletsmum said:

Thank you all for your answers.  I need to show them to my brother and discuss.  There is no other income from the estate as Mum went into care shortly before she died and what money she had (very little) paid for that.  Sorry for the late response too as I'm new to this forum and wasn't really sure how to respond.

Thanks for coming back. Hope you can work out a way forward. 

DullGreyGuy

Dogletsmum said:
Mum went into care shortly before she died 

Were the equity release company told of this? Most come to maturity if the person goes into long term care