Power of Attorney advice

Notenoughsleep

Registered User
May 25, 2015
31
0
Wales
Hi everyone,
I’m after some advice regarding buying my mam’s house which she owns half of with my stepsister (who doesn’t live there). I hold POA for mam and need to sell the house on her behalf to pay for her fees. I’d like to buy the house from my mam but have had advice from a solicitor who explained that as I hold POA for her and wish to buy the house from her, there could be a conflict of interest and I would have to apply to the OPG for guidance. I understand this as I would need to have the best possible valuation on the house on mam’s behalf as seller and the lowest valuation on my behalf as buyer! Just wondering if anyone else has gone down this route of buying a parent's property and if so, how much extra money did they incur in seeking OPG’s approval and how long did it take. Hope this makes sense. Thanks for reading.
 

Kevinl

Registered User
Aug 24, 2013
6,050
0
Salford
As I read it you have to apply to the OPG, from their factsheet (link below);

"5. Selling when an owner has lost mental capacity
You must apply to the Court of Protection if all of the following apply:
you’re one of 2 or more owners of property or land
one of the owners has lost ‘mental capacity’
you want to sell the property or land"

There's a second link to their guidance notes.
Could you get the LA to agree to a deferred payment against her half of the house>
As your stepsister owns half the house they can't force her to sell her half so you could move in and maybe pay her rent on her half. I guess you would have to pay rent to your mum too but you'd not be paying a mortgage. When your mother passes away you could then repay the money owed to the LA and buy out your SS's half share of her for the market rate.
It's messy but dealing with the OPG is not always easy either.
I put this forward as a possible solution but run it past your solicitor too.
K

https://www.gov.uk/joint-property-ownership/selling-when-an-owner-has-lost-mental-capacity

http://hmctsformfinder.justice.gov.uk/courtfinder/forms/cop-gn002-eng.pdf
 

susy

Registered User
Jul 29, 2013
801
0
North East
Not sure about this but I thought that as your sister owns half of the house. If she does not agree to the house being sold then half the house is worthless therefore the house has to be disregarded.
 

Kevinl

Registered User
Aug 24, 2013
6,050
0
Salford
Not sure about this but I thought that as your sister owns half of the house. If she does not agree to the house being sold then half the house is worthless therefore the house has to be disregarded.

This has been done successfully under the old CRAC regulations but they have now been replaced by the 2014 care act. The new act Annex B, Section 18 says that:

"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. 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."

There is no mention of them having to find a willing buyer any longer, I think that this will be used to close the nil value loophole, time will tell if this still holds good.
K
 

Notenoughsleep

Registered User
May 25, 2015
31
0
Wales
What to do with the house???

This has been done successfully under the old CRAC regulations but they have now been replaced by the 2014 care act. The new act Annex B, Section 18 says that:

"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. 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."

There is no mention of them having to find a willing buyer any longer, I think that this will be used to close the nil value loophole, time will tell if this still holds good.
K

Thanks for your replies. I’m still not sure what to do though. I don’t like the idea of moving in and paying rent to step sister (I don’t know if I legally could anyway). After mam’s days, her half of the house (approx value £100,000) is left to me so we could sell ours (which is also worth about £100,000), buy out stepsister (£50,000) and pay off our mortgage (also £50,000) from that. But if I go down the deferred fees route, how would I pay the fees? Mam’s liquid assets have been eaten up paying for her care so all is left is the house. I’m afraid I’m not the brightest star and fear I’m not seeing something here! Any advice??
 

Pete R

Registered User
Jul 26, 2014
2,036
0
Staffs
But if I go down the deferred fees route, how would I pay the fees? Mam’s liquid assets have been eaten up paying for her care so all is left is the house. I’m afraid I’m not the brightest star and fear I’m not seeing something here! Any advice??
With a Deferred Payment Agreement the Local Authority pay the fees (the exact amount is agreed between you and depends on life expectancy and value of house). On death (or any time before) the total amount of the debt becomes payable. That can be from the sale of the house or any other means. There maybe some charges/interest involved so is not always suitable.

All owners of the property have to agree to a legal charge put on the house which guarantees the LA will be refunded. You can sign as PoA for your Mam and your sister would also have to agree.

:)
 

Notenoughsleep

Registered User
May 25, 2015
31
0
Wales
With a Deferred Payment Agreement the Local Authority pay the fees (the exact amount is agreed between you and depends on life expectancy and value of house). On death (or any time before) the total amount of the debt becomes payable. That can be from the sale of the house or any other means. There maybe some charges/interest involved so is not always suitable.

All owners of the property have to agree to a legal charge put on the house which guarantees the LA will be refunded. You can sign as PoA for your Mam and your sister would also have to agree.

:)

Thank you. The thing is, I don’t want to sell it at all - I want to buy it/inherit it. Also think step sister might object to a charge being put on the house. Oh dear! Might be better to just forget it completely and sell it under the POA. Something else to keep me awake …!
 

Kevinl

Registered User
Aug 24, 2013
6,050
0
Salford
They can only put a charge on the 50% of the house your mum owns, your sisters 50% of the value can't be touched.
K
 

Pete R

Registered User
Jul 26, 2014
2,036
0
Staffs
They can only put a charge on the 50% of the house your mum owns, your sisters 50% of the value can't be touched.
K
Yes it can with agreement. However the Sister must be aware that on agreeing to the charge being placed on the property the debt falls on the property and not just on the Mother.

The Sister should seek her own financial advice.
 

Pete R

Registered User
Jul 26, 2014
2,036
0
Staffs
Thank you. The thing is, I don’t want to sell it at all - I want to buy it/inherit it. Also think step sister might object to a charge being put on the house. Oh dear! Might be better to just forget it completely and sell it under the POA. Something else to keep me awake …!
As I said you are not forced to sell "just" repay the debt to the LA. On death you could sell your own house to pay it off and then buy out your Sister.

Yes she would have to agree to the charge but she will also have to agree to any sale or offer you make to buy her half.

Hope it works out for you.:)
 

Notenoughsleep

Registered User
May 25, 2015
31
0
Wales
As I said you are not forced to sell "just" repay the debt to the LA. On death you could sell your own house to pay it off and then buy out your Sister.

Yes she would have to agree to the charge but she will also have to agree to any sale or offer you make to buy her half.

Hope it works out for you.:)

Thank you so much for your advice Pete R. I think my head's a bit clearer now.:)
 

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