Transfer of Equity - Illegal to live in property?

Hi there,

I'm currently a joint tenant on the family home with my dad. We're looking to transfer the property in my sole name (I pay the full mortgage) and we contacted our mortgage provider to help facilitate this process.

The mortgage advisor told us that if we were to do a Transfer of Equity into my sole name then it would be illegal for my dad to continue living in the property? Is this correct? I haven't come across any information online which would suggest that this is the case.

If it is true, can someone explain the rationale as to why it works this way please?

Many thanks for your support!

Comments

  • Brie
    Brie Posts: 9,307
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    That sounds ludicrous!  If you own the house then you can let anyone you want live in it.

    Question: Are you buying your father's share or is he gifting it to you?  Just be aware that he may still be deemed owning his share if he needs a financial assessment done by the council for funding of care.
    "Never retract, never explain, never apologise; get things done and let them howl.”
  • SA789
    SA789 Posts: 22
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    Brie said:
    That sounds ludicrous!  If you own the house then you can let anyone you want live in it.

    Question: Are you buying your father's share or is he gifting it to you?  Just be aware that he may still be deemed owning his share if he needs a financial assessment done by the council for funding of care.
    Thanks for responding and agree!

    He would be gifting it to me so no consideration changes hand and he comes off the title deed and mortgage. Do you see any issues with this?
  • Brie
    Brie Posts: 9,307
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    edited 1 February at 6:52PM
    It's not a problem if he has buckets of money and other assets and is never ever ever going to need assistance from the local authority for care at some point. 

    It might not matter if he needs care in the home - if he's living with you they wouldn't ask him to sell "his" home in those circumstances so who owns the home is immaterial. 

    It may very well matter if he needs to go into a council funded care home in which case they will do a full financial assessment going back years and his gift to you will be questioned as a deprivation of assets.  Lots of people have tried to give their property to children or sell it to them very cheaply and that causes a problem. 

    In our situation MiL sold her flat, gave us a bit of that money so that we could buy a place where she and us could all live together.  When she had to go into a care home the council said that they wanted us to sell the house so that her care could be funded otherwise they would put a charge on the property to recoup the money at a later date.  She didn't have a lot of savings so would have burned through those in well less than a year but un/fortunately died before the council needed to take any action.  Your council may not take this attitude.

    The other consideration is that if he has buckets of money and assets then the value of the gift to you might be included in his IHT.  Particularly pertinent I believe if he died within 7 years.   
    "Never retract, never explain, never apologise; get things done and let them howl.”
  • Yorkie1
    Yorkie1 Posts: 11,527
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    "Illegal" refers to criminal activity - which certainly isn't the case.

    "Unlawful" refers to civil law, such as contract or similar.

    I suspect they may be thinking about the obligation to give vacant possession when you give up title to a property (usually by way of sale); but 1) I may not be right (just floating it for others to consider); and 2) often there is a workaround in similar situations of the persion who is 'selling' signing something to confirm they don't have an ongoing interest in the property. The mortgage firm's concern in such situations is that if they need to repossess, they can do so without someone claiming a right to live there.
  • Keep_pedalling
    Keep_pedalling Posts: 16,218
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    It’s not illegal but it would be very foolish for your father to give his long term security away. What happens to him if you predecease him, run into financial difficulty or get divorced. 

    If you don’t live with him then you will also be setting up a CGT liability for the future.
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