In housing association property but inherited a property - what to do?

Grumpy_chap

RociCap said:

Hello - my dad lives in a housing association property (but not been in a year yet, so not yet a secure tenancy) and has, out of the blue, been told he's inherited a property from an uncle.

My dad doesn't work and recieves both PIP and UC - he understands he will presumably no longer be eligible for UC once the property is in his name as it's an asset, that's no issue. His wish would be to sell the inherited property immediately or potentially rent it out as a form of income to replace the UC, staying where he is - but he's convinced that owning a property will automatically make him ineligible for his housing association tenancy.

I can't see anything in his tenancy agreement to this effect and I've made an appointment with a solicitor to talk to them about it on his behalf, but that's not for a couple of weeks and I wanted to try and gauge the likely outcomes so I can prepare him - his health has suffered badly with this move as it is, I can't imagine telling him he's got to move again to a property that will be poorly suited (and in dreadful condition, although that's not likely to make a difference to anyone's decision as it is liveable). Obviously if that's the case then what has to happen, but I'm just trying to get an idea of the potential scenarios.

Any experience in this area would be really helpful!

Does the Will say that he will inherit the house?
Or does the Will require the Executor to liquidate the Estate and he inherits the value realised from the house?
Either way, he will likely be above the capital threshold for UC once the Executor distributes the Estate.

Keep_pedalling

RociCap said:

Keep_pedalling said:

Inheriting the other property will notify pact his tenancy, but he should be very wary about becoming a landlord as it is comes with a lot of responsibilities, at it is highly likely that he would have to spend a considerable amount of money getting up to standard before he could earn any income. 

Unless the house is suitable for his own use probably best to instruct the executor to sell and receive his inheritance in cash. 

Yeah that's a really good point about the house - he hasn't got the money to do it up and it's not in a lettable state at the moment. Plus I worry he wouldn't have the funds to maintain it to a decent standard for tenants, which isn't fair on them and could land him in trouble. Interesting point at the end - I don't think that's possible as it's specifically the house he's been left, rather than a portion of/a whole estate which includes the house.

Yes it is possible, it is a perfectly normal thing to do and it will save your father the trouble of selling it himself. Also if he has never owned a house in the past it will avoid him loosing hist first time buyer status if he decides to use the proceeds to buy himself something more suitable. 

Emmia

Keep_pedalling said:

RociCap said:

Keep_pedalling said:

Inheriting the other property will notify pact his tenancy, but he should be very wary about becoming a landlord as it is comes with a lot of responsibilities, at it is highly likely that he would have to spend a considerable amount of money getting up to standard before he could earn any income. 

Unless the house is suitable for his own use probably best to instruct the executor to sell and receive his inheritance in cash. 

Yeah that's a really good point about the house - he hasn't got the money to do it up and it's not in a lettable state at the moment. Plus I worry he wouldn't have the funds to maintain it to a decent standard for tenants, which isn't fair on them and could land him in trouble. Interesting point at the end - I don't think that's possible as it's specifically the house he's been left, rather than a portion of/a whole estate which includes the house.

Yes it is possible, it is a perfectly normal thing to do and it will save your father the trouble of selling it himself. Also if he has never owned a house in the past it will avoid him loosing hist first time buyer status if he decides to use the proceeds to buy himself something more suitable. 

A deed of variation could allow the house to be sold by the executor and the proceeds given instead. This is the route I'd go down if the property wasn't suitable.

FlorayG

I know nothing about UC but there's no way the HA will make him move, especially if he intends to sell the inherited property which is clearly the best option. Don't worry and just get on with helping him to sell it.

housebuyer143

You will find it easier if the executor sells it. If they don't they will have to transfer it into his name, and then he will have trouble selling it for 6 months because lenders don't like to lend if it's changed hands within 6 months. Then he will have the associated costs of running it, maybe council tax, gas and electric, insurance. UC will probably disregard the property if he is selling it, but it's just another headache to sort. 
It's very normal to have the executor sell it instead and give the money, so try and go that route or he might have a lot of extra bills to pay which he might not be able to afford. 

RAS

Who is the executor?

RociCap

Grumpy_chap said:

RociCap said:

Hello - my dad lives in a housing association property (but not been in a year yet, so not yet a secure tenancy) and has, out of the blue, been told he's inherited a property from an uncle.

My dad doesn't work and recieves both PIP and UC - he understands he will presumably no longer be eligible for UC once the property is in his name as it's an asset, that's no issue. His wish would be to sell the inherited property immediately or potentially rent it out as a form of income to replace the UC, staying where he is - but he's convinced that owning a property will automatically make him ineligible for his housing association tenancy.

I can't see anything in his tenancy agreement to this effect and I've made an appointment with a solicitor to talk to them about it on his behalf, but that's not for a couple of weeks and I wanted to try and gauge the likely outcomes so I can prepare him - his health has suffered badly with this move as it is, I can't imagine telling him he's got to move again to a property that will be poorly suited (and in dreadful condition, although that's not likely to make a difference to anyone's decision as it is liveable). Obviously if that's the case then what has to happen, but I'm just trying to get an idea of the potential scenarios.

Any experience in this area would be really helpful!

Does the Will say that he will inherit the house?
Or does the Will require the Executor to liquidate the Estate and he inherits the value realised from the house?
Either way, he will likely be above the capital threshold for UC once the Executor distributes the Estate.

The will specifies he inherits the house specifically. That bit is fine, he's expecting to be above the threshold for UC and I'll help him out if necessary - he's hoping to be fit to work again in the next 6 months so that part isn't necessarily a problem thankfully!

RociCap

RAS said:

Who is the executor?

A solicitor - I've asked my dad's cousin (who is one of the other beneficiaries) who so I'll be able to contact them if needs be

Bossyboots

My adult children recently inherited a house. It has already been sold by the executor and the proceeds released to the children. It remained in the deceased name until sold.  It was all very simple. 

The proceeds will affect benefits of course but better than the prospect of living in an unsuitable house. The money will buy choices.

Keep_pedalling

Emmia said:

Keep_pedalling said:

RociCap said:

Keep_pedalling said:

Inheriting the other property will notify pact his tenancy, but he should be very wary about becoming a landlord as it is comes with a lot of responsibilities, at it is highly likely that he would have to spend a considerable amount of money getting up to standard before he could earn any income. 

Unless the house is suitable for his own use probably best to instruct the executor to sell and receive his inheritance in cash. 

Yeah that's a really good point about the house - he hasn't got the money to do it up and it's not in a lettable state at the moment. Plus I worry he wouldn't have the funds to maintain it to a decent standard for tenants, which isn't fair on them and could land him in trouble. Interesting point at the end - I don't think that's possible as it's specifically the house he's been left, rather than a portion of/a whole estate which includes the house.

Yes it is possible, it is a perfectly normal thing to do and it will save your father the trouble of selling it himself. Also if he has never owned a house in the past it will avoid him loosing hist first time buyer status if he decides to use the proceeds to buy himself something more suitable. 

A deed of variation could allow the house to be sold by the executor and the proceeds given instead. This is the route I'd go down if the property wasn't suitable.

A deed of variation is only required if a beneficiary wants to pass their inheritance to someone else and wants to avoid their bequest becoming part of their estate for IHT purposes. It is not needed or appropriate in this case. If instructed by the beneficiary to sell and distribute the proceeds as cash the executor can do that as the grant of probate gives them the authority to sell the property.

Sometimes a will will instructs the executors to sell a property and distribute the proceeds, when it doesn’t then the beneficiary has the choice of house or proceeds, a will can’t force someone to take on the ownership of a property.

If the OP wants further advice on this they would be better off posting over on the deaths, funerals and probate board.

https://forums.moneysavingexpert.com/categories/deaths-funerals-probate