Help please - Tenants in Common

[Pete R]

..........since a real valuation of half a house is unlikely to be a lot.

Under CRAG it was worthless but my understanding of CA2014 is that the percentage share is just that, the real value.

There was someone on here a while back that owned half a share of a property with parents that the LA wanted when they went into care. The difference in that case was that he did not live there and just owned half.

That is why the OP needs proper advice as the property is still their home and that might just make a difference.

 

[Kevinl]

deter people from moving their relatives into their own homes for care, as it then becomes necessary to sell once they reach a stage of needing residential care. Everyone loses out then.

 

[jenniferpa]

I was just looking at the guidance for the care act and it doesn't totally rule out the possibility that the valuation of half a property might be less than half the value of the whole but I totally agree with you about getting professional help. Let me see if I can find the section again.

 

[Pete R]

The LA have sent them a bill for the last 2 months care for the parents, what do they do, are they liable for the costs as joint tenants?
K

No one can be held financially responsible for another's care. However the financial assessment of the in laws has obviously determined they own a share of the property. How the LA can actually realise that money whilst it is still the OP's home is beyond me.

 

[jenniferpa]

Calculating the value of capital
14) A local authority will need to work out what value a capital asset has in order to take account of it in the financial assessment. Other than National Savings Certificates, valuation must be the current market or surrender value of the capital asset, for example, property, whichever is higher, minus the following:

1. (a) 10% of the value if there will be any actual expenses involved in selling the asset. This must be expenses connected with the actual sale and not simply the realisation of the asset. For example the costs to withdraw funds from a bank account are not expenses of sale, but legal fees to sell a property would be
2. (b) any outstanding debts secured on the asset, for example a mortgage

15) A capital asset may have a current market value, for example stocks or shares, or a surrender value, for example premium bonds. The current market value will be the price a willing buyer would pay to a willing seller. The way the market value is obtained will depend on the type of asset held.

16) If the person and the assessing officer both agree that after deducting any relevant amounts set out in paragraph 14 that the total value of the person’s capital is more than the upper capital limit of £23,250, or less then the lower capital limit of £14,250, then it is not necessary to obtain a precise valuation. If there are any disputes, a precise valuation should be obtained. However, the local authority should bear in mind how close someone is to the upper capital limit when deciding whether or not to obtain a precise valuation.

17) Where a precise valuation is required, a professional valuer should be asked to provide a current market valuation. Once the asset is sold, the capital value to be taken into account is the actual amount realised from the sale, minus any actual expenses of the sale.

18) Where the value of a property is disputed, the aim should be to resolve this as quickly as possible. Local authorities should try to obtain an independent valuation of the person’s beneficial share of the property within the 12-week disregard period where a person is in a care home. This will enable local authorities to work out what charges a person should pay and enable the person, or their representative, to consider whether to seek a deferred payment agreement.


Note the bit in bold. I do not see why a house would be excluded from this verbiage.

 

[Kevinl]

But then goes on to say "18) Where the value of a property is disputed, the aim should be to resolve this as quickly as possible. Local authorities should try to obtain an independent valuation of the person’s beneficial share of the property within the 12-week disregard period where a person is in a care home. This will enable local authorities to work out what charges a person should pay and enable the person, or their representative, to consider whether to seek a deferred payment agreement"
So not the market value of their half the house but the beneficial value of that half, that's a lot different. Under the old regulations the value was the "market" value and the market value of half a house was often accepted by the LA as being zero, now that's been changed to the beneficial interest the goalposts have moved.
K

 

[jenniferpa]

Yes I know. But as @Pete R said above, how the la get that money is the big question. If the op doesn't agree to a deferred payment agreement (as a co-owner) there can't be one. I guess they'd have to sue the resident. They might just decide a discretionary disregard is the way to go.

 

[HillyBilly]

What a potential awful problem for the OP.
Thinking/questioning out loud here.
Let's say the property is presently "worth" 200,000 and that each of the 4 owners own 25%, so 50,000 each.
So, as far as the LA is concerned, they want that 100,000 of property that is owned by the 2 people now in care. The lower threshold for nil contribution is 14,250 per person so that's 29,000 that can "come off" that 100.000, leaving 71,000 in the asset that needs to be "realised". (?)
So I suppose that the OP and her husband could "buy out" the parents to the tune of 71,000 and put those monies into accounts for their use?
Or maybe it could be argued that "only" the original capital put in by each party to buy the house needs to be "bought out"? (Am assuming the value of the house has risen since purchase).
And obviously there would be costs involved in all this, never mind the fact that it might not be financially viable for the OP and her husband to "buy out" the parents.
Definitely worth seeking specialist legal advice with a view to appealing for a discretionary disregard in my opinion.
Would the situation be different if they were joint tenants or is the tenants in common thing a red herring in all of this?

 

[jenniferpa]

I think the tenants in common is a red herring. I mean it makes sense to hold it that way for the purposes of estate distribution.

 

[Kevinl]

Would the situation be different if they were joint tenants or is the tenants in common thing a red herring in all of this?

Another question, the people here are tenants in common means no one owns a specific share of the house where joint tenants do so how legally can the LA apportion a share in something that is held in common not jointly?
As has been said the OP should get some proper advice since the 2014 care act it's all uncharted territory but I suspect the lawyer will find that too, there is no real case law it's all a matter of interpretation until some brave person gets a judge to decide.
K

 

[Pete R]

I have found what I was looking for in where maybe there is a difference between a property being jointly owned as a commercial enterprise and where it is still being occupied by a joint owner as a home.


Wilkinson case


In the case of Wilkinson v CAO [2000] EWCA civ 88, the purpose of a

gift of property was not to provide a family home. Mrs Wilkinson’s share

in a jointly owned property came to her as an inheritance on her mother’s

death. It was an absolute gift to Mrs Wilkinson and her sister, in equal

shares, with no restriction or other intended purpose. The Judge decided

that a sale of the whole property could subsequently be enforced thus

creating a market value for Mrs Wilkinson’s beneficial interest.


Palfrey case


In an earlier case, Chief Adjudication Officer v Palfrey [1995] 11LS Gaz

R39, [1995] Times, 17 February, Mr Palfrey, a joint property owner, had

gone into residential care and a question arose about how his share in

the family home should be valued when assessing entitlement to Income

Support. The house had been acquired by him and his daughter as

beneficial joint tenants.

The Judge ruled that, even though Mr Palfrey was no longer present,

where the capital asset is a jointly owned property held for the purpose

of accommodating the joint owners and that purpose is still on-going, his

beneficial interest may, at that time, only have a nominal value. Based on

this reasoning, the ongoing purpose would disappear if the joint owner

vacated the property at some future point.

https://www.ageuk.org.uk/globalasse...perty_and_paying_for_residential_care_fcs.pdf

 

[HillyBilly]

Another question, the people here are tenants in common means no one owns a specific share of the house where joint tenants do so how legally can the LA apportion a share in something that is held in common not jointly?
K

I understood it was the opposite!
https://www.gov.uk/joint-property-ownership

 

[annawolowiec]

7.003
Where the resident no longer occupies a dwelling as
their home, its value should still be
disregarded where it is occupied in whole or in part
as their only or main home
by
•
the resident's partner, former partner or civil partner (except where the resident is
estranged or divorced from the partner, former
partner or civil partner)
•
a lone parent who is the claimant’s estranged or divorced partner
•
a relative (as defined at 7.004) of the resident or member of the residents family (as
defined at 7.007) who
-
is aged 60 or over, or
-
is a child of the resident aged under 16, or
Meaning of relative
7.007
The term "relative" in paragraph 7.003 includes any of the following:
A.
parent (including an adoptive parent)
B.
parent
-in -law
C.
son (including an adopti
ve son)
D.
son-
in -law
E.
daughter (including an adoptive daughter)
F.
daughter
-in -law
G.
stepparent
H.
stepson
I.
stepdaughter
J.
brother
K.
sister
L.
grandparent
M.
grandchild
N.
uncle
O.
aunt
P.
nephew
Q.
niece
R.
the
spouse, civil partner or unmarried partner of any of A to K inclusive

 

[annawolowiec]

7.003
Where the resident no longer occupies a dwelling as
their home, its value should still be
disregarded where it is occupied in whole or in part
as their only or main home
by
•
the resident's partner, former partner or civil partner (except where the resident is
estranged or divorced from the partner, former
partner or civil partner)
•
a lone parent who is the claimant’s estranged or divorced partner
•
a relative (as defined at 7.004) of the resident or member of the residents family (as
defined at 7.007) who
-
is aged 60 or over, or
-
is a child of the resident aged under 16, or
Meaning of relative
7.007
The term "relative" in paragraph 7.003 includes any of the following:
A.
parent (including an adoptive parent)
B.
parent
-in -law
C.
son (including an adopti
ve son)
D.
son-
in -law
E.
daughter (including an adoptive daughter)
F.
daughter
-in -law
G.
stepparent
H.
stepson
I.
stepdaughter
J.
brother
K.
sister
L.
grandparent
M.
grandchild
N.
uncle
O.
aunt
P.
nephew
Q.
niece
R.
the
spouse, civil partner or unmarried partner of any of A to K inclusive

Does this not mean that LA have to disregard due to 2 children living there who are their grandchildre?

 

[jenniferpa]

No. It only applies to grandchildren if they are also disabled. The child must be the child of the resident to count. If either of you (the parents) were disabled you would count as well.

 

[annawolowiec]

No. It only applies to grandchildren if they are also disabled. The child must be the child of the resident to count. If either of you (the parents) were disabled you would count as well.

However my husband and I are also legal owbers of the property so owuld this not apply to our children?

 

[jenniferpa]

Well obviously the fact that you are part owners complicates the issue. Which is why I think the best possibility is a discretionary disregard. Because you don't have a right to a statutory disregard.

The thing is, your parents have an actual and beneficial interest in the property. The real question is how will the la value that interest and what they can do to enforce that valuation. Apart from the case that Pete posted above (and that is from almost 20 years ago when different laws were in effect) I am not aware of a case which is really on point here, which doesn't of course mean there isn't one.

You really are going to have to take specialist legal advice, particularly if the la doesn't give you a discretionary disregard when you ask for one.

How have your parents been funded since March?

 

[Shedrech]

as I read it, the 'resident' here applies to each of your husband's parents as they are the ones who have moved into a care home and it's their fees that need funding
so any 'child' is a child of theirs ie your husband - and he does not (as far as we are aware) fulfil any of those requirements ie being over 60 or disabled
not a grandchild, for whom they have no parental responsibility; that responsibility falls to your husband and you

if you and your husband had moved into care, that clause would have come into play to ensure your children could remain in the family home until they are legally adults

in effect, it's not what any of us think, it's how the LA and their legal advisors read the guidelines that counts - as they are seeking payment of fees, they do not appear to read that clause as you do
so you need professional advice - we can only give opinions

edited for spelling correction

 

[jenniferpa]

Precisely @Shedrech . I agree with all your points.

 

[annawolowiec]

Well obviously the fact that you are part owners complicates the issue. Which is why I think the best possibility is a discretionary disregard. Because you don't have a right to a statutory disregard.

The thing is, your parents have an actual and beneficial interest in the property. The real question is how will the la value that interest and what they can do to enforce that valuation. Apart from the case that Pete posted above (and that is from almost 20 years ago when different laws were in effect) I am not aware of a case which is really on point here, which doesn't of course mean there isn't one.

You really are going to have to take specialist legal advice, particularly if the la doesn't give you a discretionary disregard when you ask for one.

How have your parents been funded since March?

I just received a letter to say that we are responsible to pay full amount of their care backdated to 17th August. Letter arrived last Friday.