Can council force sale of jointly owned house for care debt

sclare

... And if so how does it work? 

My mum died a couple of months ago with a huge amount of care debt (a self funder who ran out of liquid funds). She and I owned a rental property as joint tenants (bought when she was fit and well). 
I'm told that the council will want half the value of the house (at least) and will want to force a sale. There is no charge on the property which has now reverted to me by survivorship. 

I have no problem with selling the place (I have no interest in being a landlord - it has been let by an agency for over a decade, with all proceeds going to my mum to help pay her care fees). But how will this work? Who pays the expenses of selling? There's a tenant in place so it could take a long time before it can be sold, depending on how long she appeals the section 21. Will they wait? 

Any information or experience of this much appreciated. 

elsien

Did the council make a deferred payment agreement with her with regards to her half of the property at the point her money ran out?
if yes, and the property does need to be sold, I have no clue about the expenses and how that  works, but the council would have to wait for the money if there is nothing else in the estate to pay the debt. They have no option because the debt is from your mum’s estate and you are not liable for it. I would presume the expenses also come from the estate? 

tacpot12

I think that the estate and the OP would pay half the cost of sale each. There will be some CGT to pay on the sale of the property that will need to be paid within 60 days of the sale. 

Challenging the sale will only add cost to the council, so the sensible action would be to try to sell the property quickly for the best price possible. You can consider selling with the sitting tenant to another landlord, but shoudl agree this course of action with the council. They may want to evict the tenant to get the best possible price for the property. You could mention that, given the housing crisis and shortage of council housing stock that eviciting the tenant runs the risk that the tenant might present themselves to the same council as homeless and add to the council's costs. (A robbing Peter to pay Paul situation)

If the property is an ex-council property, you might ask the council if they want to buy it from you with the tenant in situ. This could work if the tenant is keen for the landlord to be the local council.  

propertyrental

If OP and mum owned as Joint Tenants, then on her death the property automatically became 100% the OPs. I'm really unclear as to whether it would fall within mum's Estate?

If not, council cannot make any claim on the property. But admittedly, I'm very uncertain.

Might be worth posting on the Probate board, or seeking legal advice.

p00hsticks

propertyrental said:

If OP and mum owned as Joint Tenants, then on her death the property automatically became 100% the OPs. I'm really unclear as to whether it would fall within mum's Estate?

If not, council cannot make any claim on the property. But admittedly, I'm very uncertain.

Might be worth posting on the Probate board, or seeking legal advice.

For IHT / probate purposes, 50% of a jointly owned asset is considered as having belonged to the deceased, so I suspect the same is true when considering debts for the deceased...

Yorkie1

p00hsticks said:

propertyrental said:

If OP and mum owned as Joint Tenants, then on her death the property automatically became 100% the OPs. I'm really unclear as to whether it would fall within mum's Estate?

If not, council cannot make any claim on the property. But admittedly, I'm very uncertain.

Might be worth posting on the Probate board, or seeking legal advice.

For IHT / probate purposes, 50% of a jointly owned asset is considered as having belonged to the deceased, so I suspect the same is true when considering debts for the deceased...

Although, I assume, if the debt is larger than the 50% owned by her mum, the OP would not be legally required to make up the shortfall from her 50% of the sale proceeds?

sclare

propertyrental said:

If OP and mum owned as Joint Tenants, then on her death the property automatically became 100% the OPs. I'm really unclear as to whether it would fall within mum's Estate?

If not, council cannot make any claim on the property. But admittedly, I'm very uncertain.

Might be worth posting on the Probate board, or seeking legal advice.

propertyrental said:

If OP and mum owned as Joint Tenants, then on her death the property automatically became 100% the OPs. I'm really unclear as to whether it would fall within mum's Estate?

If not, council cannot make any claim on the property. But admittedly, I'm very uncertain.

Might be worth posting on the Probate board, or seeking legal advice.

I'm not sure that probate comes into it? The property doesn't form part of her estate as we were joint tenants. So the property became mine instantly by survivorship. The Land Registry has been informed and I have been sent the new title deeds that have me as sole owner/proprietor
However, I'm told that that doesn't stop the council coming to me for the debt, and that they can force a sale (and are more likely to these days, as all councils are suffering badly, and can't afford to ignore a debt as huge as Mum's.

doodling

Hi,

In the case where an estate is insolvent but a property has passed to a surviving joint tenant then any creditors have the option of an "Insolvency Administration Order" to go after the deceased's share of the value that was in the jointly owned property.  They have five years from the death to do this.

I don't know whether there are other legal provisions specific to the provision of care in addition to this.

I believe that the ownership split will be assumed to have been 50/50 unless there is some evidence supporting a different approach (e.g. there is evidence that the joint ownership arose as a deliberate strategy to deprive the deceased of assets to reduce the amount they had to pay for care - I note that this is not applicable in this case but you may need to convince the council).

The cost of sale would be split 50/50, just as if the deceased had decided to sell the place.  It would need an expert to comment on the CGT situation - I think you will end up paying more than the council (on the basis that their CGT will be based on the increase in value since the death rather than over the whole ownership) but I'm not sure.

sclare

Thanks for the comments so far. Bumping in case anyone has been through the same process or has other useful experience