New member with Tenants in Common question

[frenchman96]

Hi There

We changed our property deeds to TIC in 2009 and maybe before that.

At the time, my idea was to avoid IHT but that no longer is a problem.

I know when one of us dies, that 1/2 goes to our 2 kids, and surviving spouse has right to remain in house as long as he/she wants.

my questions are>>

1) if survivor needs to enter a nursing home, can they force the sale of house to gain fees from the spouse.

2) if the kids don't move into the house, does that make it any easier for the local council to chase funds.

3) if spouse (50%) and 2 kids (25% each) want/decide to sell house, will spouse then be made to pay.

 

[Kevinl]

Bonjour Monsieur, bienvenue a TP

1) if survivor needs to enter a nursing home, can they force the sale of house to gain fees from the spouse. They can force a sale but only with a court order and to date they don't usually do this, they can put a charge on the 50% owned by the person in care's share and collect the money when the house does get sold.

2) if the kids don't move into the house, does that make it any easier for the local council to chase funds. If they move in then they should pay rent for the half of the house that isn't owned by them. That's all the council could ask for as far as I'm aware.

3) if spouse (50%) and 2 kids (25% each) want/decide to sell house, will spouse then be made to pay. If you sell then then yes, the capital from the sale would count towards the persons capital and used to pay for their care.

Hope that helps, there are some real experts on here who may have more to add.
K

 

[Saffie]

I don't think No. 1 is quite correct by my understanding and by the number of posts about this on TP.
If the surviving spouse has to go into a nursing home, the LA could try to get the other Tenants-in -common to sell but if they refuse, they cannot be made to do so. So with only half a house to sell, the chances of finding buyer are pretty remote. I don't think they put a charge on it either if it sold after the resident has passed away.
Perhaps someone could confirm that - or otherwise.

However, Kevin is right that if the house is sold whilst one Tenant is in a nursing home, half the sale money will be his so he will become a self-funder.

 

[nitram]

Saffie
Things may change as a result of the Care Act

Read:-

The Trust Purpose page 18

Note at top of page 21

>>>AGEUK FACT SHEET 38<<<

 

[Kevinl]

the LA could try to get the other Tenants-in -common to sell but if they refuse, they cannot be made to do so. So with only half a house to sell, the chances of finding buyer are pretty remote.

You're right in so far as under the CRAC rules this has been tried, tested and found to be the case, however, under the new regs (annex B) it says;
"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.
For the resident’s beneficial interest in jointly owned property to have a value to a willing buyer on the open market they must be able to realise its value. This may relate to their potential ability to apply to a Court to enforce sale of the whole property."
Now this is only my interpretation but to me the last bit I've underlined is the important bit. The council are told to get a valuation of the share of the house and then to use the fact they do have the right to apply to a court and force a sale to get rid of the current loophole of the nil valuation. The effect of this could be that councils start to use the court to do more or threaten more with a forced sale.
I suppose this will need testing in court, a judge may see a forced sale as fair or not.
K

 

[count2ten]

You're right in so far as under the CRAC rules this has been tried, tested and found to be the case, however, under the new regs (annex B) it says;
"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.
For the resident’s beneficial interest in jointly owned property to have a value to a willing buyer on the open market they must be able to realise its value. This may relate to their potential ability to apply to a Court to enforce sale of the whole property."
Now this is only my interpretation but to me the last bit I've underlined is the important bit. The council are told to get a valuation of the share of the house and then to use the fact they do have the right to apply to a court and force a sale to get rid of the current loophole of the nil valuation. The effect of this could be that councils start to use the court to do more or threaten more with a forced sale.
I suppose this will need testing in court, a judge may see a forced sale as fair or not.
K

I thought the property was always disregarded if a spouse or relative over the age of 60 was living there as their main residence.

 

[Saffie]

Yes, I did wonder whether things might change with the new Care Act which is why I said I hoped somebody would confirm it or otherwise.

However, your quote, Kevin, mentions a property 'jointly owned'. So does that mean what it says i.e. Joint owners or does it include Tenants-in-common too? That's the crucial point. I really do think it's a loophole that will be slammed shut someday though as it would save LAs so much money.


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[sue38]

However, your quote, Kevin, mentions a property 'jointly owned'. So does that mean what it says i.e. Joint owners or does it include Tenants-in-common too? That's the crucial point.

'Jointly owned' does not just mean a property owned as joint tenants, it simply means owned by more than one person whether as joint tenants or as tenants in common.

 

[Saffie]

Thanks Sue. I thought probably it was so but just wanted to clarify whilst everyone is trying to work our the specifics of the new Act.
It won't apply to me unless I make my daughters TIC with me which, although I did with my husband, seems maybe not the safest thing to do with offspring and looks as though it might be pointless anyway. Unless for IT purposes of course and that's not likely!



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