Advice on empty property occupancy by relative

[llynaj]

I have full power of attorney on behalf of my Mother. She also 20 years ago made me the executor of her estate, without consulting me on this matter. She is in a Care Home in the town I live in, which is in Scotland, as is the house I am seeking advice about. Our Mother is aged 90 with Dementia. My Sister occupied the property with her partner and three grown up children, for four days after Xmas. One of her sons texted me, to ask if he could stay rent free in the property for six months. He stated he would pay for utilities and look after the property. As I had spoken to him the previous day and nothing had been said I was slightly taken aback. I replied to his text asking him to give me a couple of weeks to give the matter due consideration, he agreed.
My partner and I went to the property, the night before my Sister and her partner were leaving, to return to the South of England, to say goodbye. We had agreed not to discuss this matter as it could be a sensitive issue and lead to conflict. However my Sister insisted on bringing the matter up. When i stated "that to be honest it is a complication that i can do without", she lost her temper and accused me of being hostile to her children. She also later questioned my motives and stated she did not trust me. She has no reason not to trust me.
My fear is that although her son seems responsible and i like him, problems may arise. I am the only one of five children who lives locally and i will have to sort any contract and problems out. My Mother has been in a Care Home for four months and I had suggested it may be sensible to sell her property in the spring of 2020. This would be delayed. Two of my Sisters occupy the property for a few days when they visit my Mother twice a year.
Clearly the reason my Nephew wishes to move from his rented one bedroom flat to my Mothers house is so he does not have to pay rent for 6 months. He will also be living in a fully furnished three bedroom house.
I would be grateful for advice regarding legal contract which should be drawn up, as it is likely to happen. I told my Sister when pressured, that the final decision would be mine. However I do not want to be unreasonable and cause further serious conflict if it can be avoided.
Thank you.

[Lootman]

my Sister insisted on bringing the matter up. When i stated "that to be honest it is a complication that i can do without", she lost her temper and accused me of being hostile to her children. She also later questioned my motives and stated she did not trust me.

That sentence alone would tell me to run a mile. What else might she be hostile or distrustful about?

And why didn't she offer to pay something, if only a peppercorn rent? Although if no money changes hands then technically they would not be tenants, and so would not enjoy tenants' rights.

But even if they paid rent I'd be wary if there is a lack of trust. Being a landlord sometimes requires making tough decisions about peoples' lives. Would you be willing to evict your own family in the event of unpaid rent or bills, noise, disruption or damage? If not then you are a hostage to misfortune.

So that's one vote for "NO!".

[UnclePhilip]

"Although if no money changes hands then technically they would not be tenants, and so would not enjoy tenants' rights"

A tenancy does not require payment of rent (although, naturally, it's not common). See Ashburn Anstalt v Arnold [1989] Ch 1 CA

[Lootman]

"Although if no money changes hands then technically they would not be tenants, and so would not enjoy tenants' rights"

A tenancy does not require payment of rent (although, naturally, it's not common). See Ashburn Anstalt v Arnold [1989] Ch 1 CA

I cannot speak to that case. But surely a lease is just a special case of a contract, and a contract requires consideration in order for it to be valid. Where is the consideration when there is no payment or benefit to the lessor?

Wouldn't a free residency be more like a gift, making the resident an at-will guest of the owner? Rather like when a friend or family member stays overnight in your house, or house-sits while you are away?

[llynaj]

[That sentence alone would make me run a mile]

That was my initial reaction. However it is complicated by the fact that it is my sister. It is true that the next day she sent me a very nasty E-mail doing just that i.e. Being hostile and distrustful.

The request was not made by my Sister but by my 28 year old adult nephew after a discussion among his siblings and his Mother. However clearly my Sister was passing on to him a sense of entitlement. Stating our Mother would do anything for her Grandchildren.

Why did he not suggest paying a peppercorn rent? That is a good question.Him and his partner are going travelling for a couple of months so it would save them six months rent. Which is clearly a large sum of money for them.

[Chrysalis]

As your mothers attorney, you have to act in her best interests. I am not sure allowing her property to be occupied rent free is in her interests at all, especially if the property needs to be sold to fund her care (or to prevent deterioration and loss of value). Can you be sure you would be able to sell the property with vacant possession?

[Dod101]

There is obviously a context in all of this. Is there sufficient capital in your mother's affairs so that the house does not have to be sold to pay the care home fees? In the event of mother's death (which may or may not be some time off) who will be the beneficiaries? You are presumably the only one holding a P of A for your mother? Why do you mention that you are the executor of her estate? Are you the only one?

Right now you need to be very clear about your responsibility which comes through the Power of Attorney and act on that in her best interests and currently it would seem that that is your only legal responsibility. It seems the three sisters find it convenient to have the house for them to stay in when they come to see their mother. They could and should be sharing your burden. I have experience of that and you will need all the support you can get from them so you do not want to be alienating them unnecessarily.

In the circumstances, would your mother mind having a grandchild staying rent free in her house? Presumably not. What would the other grandchildren or for that matter your other siblings think of that? What if, as is perfectly possible, he rather likes living in his grandmother's house rent free and decides not to move out?

What is bugging your sister?

If you set out the answers to these questions that may help you to clear your mind and at the same time let those reading the post get a better idea of the situation.

Dod

[Lanark]

You need to approach this from a legalistic viewpoint.

As her brother you might be happy to let them stay in the house, but as exectuor you have a legal requirement to treat all parties equally, if you don't then that opens up the possibility of someone challenging the will in court and you all end up spending a fortune in legal fees sorting it out.

If you grant a financial benefit to one person (free rent) and not the others, how are you going to equalise that in a fair way?
If the inheritance is a 3 way split 33% each, then you might adjust that person to 31% or 29% to compensate for the thousands of pounds in free rent, but again how do you all agree on what the fair value should be?

Unless you have already opened the will, it will be hard to predict what the allocations should be in advance, you could have written agreements to this from all parties, but then when they see the final will they might change their minds.

If you have to do this I would rent it through an agent at the going market rent and put all the rent into an account in your mothers name, when she dies the rental income gets split 3 ways - so they will be getting 33% of the rent returned.

There are still dangers with this, if they add a lot of wear and tear to the house or run off with the furniture when they move out. A good agent will do a full inventory and a check-in/check-out.
In this situation it will be worth every penny of the agents fees.

[Charlottesquare]

"Although if no money changes hands then technically they would not be tenants, and so would not enjoy tenants' rights"

A tenancy does not require payment of rent (although, naturally, it's not common). See Ashburn Anstalt v Arnold [1989] Ch 1 CA

I cannot speak to that case. But surely a lease is just a special case of a contract, and a contract requires consideration in order for it to be valid. Where is the consideration when there is no payment or benefit to the lessor?

Wouldn't a free residency be more like a gift, making the resident an at-will guest of the owner? Rather like when a friend or family member stays overnight in your house, or house-sits while you are away?

Beware, Scots law applies re the contract,

"The English requirement for consideration does not apply in Scotland, so it is possible to have a gratuitous contract"
https://en.wikipedia.org/wiki/Scots_contract_law

However given over thirty years since I studied contract law and given that Scottish tenancy law re residential property is very different from that down south and also given the implicit obligation held under the POA to act in the best interests of the owner of the property, I would take professional advice before doing anything.

[Dod101]

You need to approach this from a legalistic viewpoint.

As her brother you might be happy to let them stay in the house, but as exectuor you have a legal requirement to treat all parties equally, if you don't then that opens up the possibility of someone challenging the will in court and you all end up spending a fortune in legal fees sorting it out.

What has being an executor got to do with it? That only comes in to play after the mother has died. He is not an executor of the estate with all the responsibilities that that implies until after the mother has gone. He need not even know that he is being appointed an executor. His current responsibility is only as the holder of the P of A surely.

If the OP is going to approach this purely from a legalistic point of view then I would get a solicitor involved otherwise the OP is going to get a lot of undeserved stick which he does not need nor probably deserves.

As long as the mother is alive it is no one's business except hers and of course her appointed Attorney how her affairs are handled.

Dod

[Howard]

You are being put in a difficult position by your sister and nephew. And from what you have written so far, it could get worse in future. It is likely that you will have to be firm about some issues regarding the house and this might lead to a more stressful situation. And as others have said, your nephew is asking to extract a financial benefit from your Mother's assets.

If your Mother does not have a significant amount of investments/cash, my advice would be to put her house on the market straight away. If your Mother lives for many years more, with the proceeds of the house sale, it will be easier to pay the home fees etc. In my limited experience of handling parent's affairs and probate, it is much easier to deal with a cash situation for an Estate because it is straightforward to divide up cash in line with a will.

Best wishes whatever you decide. You are going to have to be firm (and, of course, fair to all those benefiting from your Mother's estate) in whatever course of action you take.

regards

Howard

[scrumpyjack]

One option would be to get written advice from a solicitor on whether letting someone live rent free in your mother's house is consistent with your duties as Attorney. At least that way your sister's anger might be redirected away from you somewhat, at the cost of a couple of hundred.

[llynaj]

One option would be to get written advice from a solicitor on whether letting someone live rent free in your mother's house is consistent with your duties as Attorney. At least that way your sister's anger might be redirected away from you somewhat, at the cost of a couple of hundred.

Good advice. Input on this board has been very helpful in this regard.

[PinkDalek]

One option would be to get written advice from a solicitor on whether letting someone live rent free in your mother's house is consistent with your duties as Attorney. At least that way your sister's anger might be redirected away from you somewhat, at the cost of a couple of hundred.

Good advice. Input on this board has been very helpful in this regard.

Whilst you are at it and in case you haven't already done so, has anyone checked the House Insurance Policy is being complied with in regards to periods of unoccupancy under the current situation and the fact that your mother no longer resides there?

[llynaj]

There is obviously a context in all of this. Is there sufficient capital in your mother's affairs so that the house does not have to be sold to pay the care home fees? In the event of mother's death (which may or may not be some time off) who will be the beneficiaries? You are presumably the only one holding a P of A for your mother? Why do you mention that you are the executor of her estate? Are you the only one?

Right now you need to be very clear about your responsibility which comes through the Power of Attorney and act on that in her best interests and currently it would seem that that is your only legal responsibility. It seems the three sisters find it convenient to have the house for them to stay in when they come to see their mother. They could and should be sharing your burden. I have experience of that and you will need all the support you can get from them so you do not want to be alienating them unnecessarily.

In the circumstances, would your mother mind having a grandchild staying rent free in her house? Presumably not. What would the other grandchildren or for that matter your other siblings think of that? What if, as is perfectly possible, he rather likes living in his grandmother's house rent free and decides not to move out?

What is bugging your sister?

If you set out the answers to these questions that may help you to clear your mind and at the same time let those reading the post get a better idea of the situation.

Dod

There is sufficient capital to pay care home fees for some three years. The estate is divided in 6 parts, five parts for 5 children and the sixth part divided equally among Grandchildren, potential tenant being one of those Grandchildren. I am the only one holding P.O.A and sole executor. I mentioned executor to prevent misunderstanding that P.O.A was contentious. It was on advice of Doctor and Psychiatrist who carried out Dementia assessment.

Two of the three sisters have long journeys and find it convenient to stay in house, the third has a 40 minute bus journey, the fourth brother has no contact with any of his siblings and has not seen his Mother in years. The immense burden was when my Mother was living at home, with falls and the fear of her falling down stairs. Now she is in a safe secure and well run care home the worry and anxiety has been lifted.

My Mother would probably not mind having her Grandchild living in her house rent free. After this conflict arose I sent a copy of Will and P.O.A to the sister who had requested it and copied in the other two sisters.

My Sister lost her temper and did not understand that when I stated that the final decision after consultation would be mine I was stating a legal position. Rather than acting in a dictatorial manner.

[Dod101]

Thanks for all of that background. There are a lot of people involved in the situation and I think that to be equitable and treat them all alike, it would be best to say that the grandson should not live in grandmother's house rent free. That would benefit him unfairly vis a vis all the other parties and would leave plenty of scope for further ill feeling, even if no one else complained at the moment.

Leaving the house empty of course has its own downside, costs of maintenance, insurance, council tax, ongoing security and so on. However in view of the potential conflict, I think a family get together to discuss the situation would be best, and of course you would come armed with info on the legal position of yourself as Attorney. In fact, with the invitation you ought to enclose official advice as to not just the powers of the attorney but also the responsibilities that come with it. Selling is probably the best solution although at a push a short term tenancy for the grandson might be possible but at some sort of rent (or none if everyone agrees) But a formal written agreement should be in place.

So long as you comply with your responsibilities under the P of A no one can legally complain but within families I am a firm believer in trying to avoid a legalistic approach if possible.

Sorry that that is about as much as I can contribute. best of luck!

Dod

[stewamax]

Whether the English principal private residence CGT-relief rules apply in Scotland I don't know, but if a house owner moves to a care home there is a maximum of 36 months (rather than the usual 24 months) final absence dispensation allowable on the sale.

[scrumpyjack]

Whether the English principal private residence CGT-relief rules apply in Scotland I don't know, but if a house owner moves to a care home there is a maximum of 36 months (rather than the usual 24 months) final absence dispensation allowable on the sale.

There is no CGT anyway at death so if the house is sold by the executor after death, the probate value is 'cost' for CGT purposes. If a gain arises then, the estate gets the CGT personal allowance whilst in the administration period (for at least two years).

[stewamax]

Indeed.
I was trying to cover the position where OP's mother lived several years in the care home and it was necessary to sell the house to cover care home fees (as opposed to the local authority taking a charge on the house, to be realised post mortem). As I understood things (perhaps wrongly), OP acting with an LPA would have three years' grace (starting from when mother entered the care home) to sell before a period of PPR 'non-residence' would kick in.

[Dod101]

And can I just add that the thoughts I have outlined are just that, thoughts. I have no special knowledge but just some experience of families and relationships and how fraught they can get.

Dod