Yes, the only charge on the property is mine. It is Freehold.
Why does it end in 2015?
How old is Freya?
The charge is in the form of a mortgage with a term of 4 years from September 2011.
Freya's date of birth is 16/10/1998 so she is 14
So is Marie repaying the mortgage?
Will it be repaid in 2015?
No, she is paying nothing - the mortgage states that she should pay £300 per month but she has only made two payments.
I have agreed to overlook this, I want her and Freya to feel secure and I don't need the money.
Therefore the mortgage will be repaid if/when the house is sold.
I am willing to change anything on the mortgage and to give indefinite term but want to make sure that if Freya needs money for a big thing in the future (like buying a house) that Marie is obligated to either pay her the balance of the charge or sell the house.
Will Marie agree to this?
Yes she will, she says
I am not certain what you meanby saying that you want to make sure the house charge of £230 is available forFreya in the future after 21 (or 18, or whatever). Either she is getting acharge on the house occupied by Marie or she is getting the house.
Until Freya is 18 herinterests must be looked after by a trustee. After that, he can look afterthings herself.
My suggestion would be to seea solicitor who will draft a deed of trust whereby the house is held on trustfor Freya until she is 18, and thereafter it becomes hers.
Marie would be granted a lifeinterest in the house to live in it until she dies or no longer wants to. Afterthat, it would then go to Freya to do with as she wishes.
The difficulty is to grant aninterest to Marie which can be determined at any time that Freya wants it to beif for example she wants the money.
You are also, cannot dictatewhat happens to it after Freya has got it. Either she has it or she does nothave it so you cannot say that XXXXX XXXXXves in the house for life, or untilFreya decides that she wants the money.
You also cannot say that whenFreya dies the house is to go to your step children.
On these facts, you are goingto have to rethink what you are doing , because at the moment you are makingthings so complicated that they are unworkable.
I already understood all your points, which is why I am asking for creative advice.
Two possibilities occur to me which you haven't mentioned:
1) Setting up a trust which can be terminated on Marie's death whose primary beneficiary is Freya and secondary beneficiaries are Sophie and Chloe. (is this possible). The trustees can then ensure that the money represented by the charge is used for Freya.
2) A letter of intent signed by me saying that I will not repossess the house after the term of the mortgage and will only do so if Freya needs the money.
Tell me exactly what you want to achieve and I will tell you how to get there. What you wanted initially isnt doable.
You can give Marie a life interest which ends on death or Freya gets it when Marie dies or remarries or cohabits.
Would that do it.
Freya might having nothing at 25 if she needs it though
What I want to achieve is set out in the attached two letters of intent / commitment. Can you comment on them or tell me a better way to ensure the same outcomes.
Thanks for your help.
7th March 2013
This letter is to set out my commitments that we have been talking about in writing.
1) Although the term of the Legal Charge on the house is due to end in 2015, I agree not to call for a repayment of the charge, nor enforce the repayment terms, unless Freya needs the money for some substantial reason in the future and after she is 18.
2) If you die whilst the Legal Charge is still held on the house then I will transfer it to Freya and she can decide what to do with the house if she is over 18 and if under then I will hold it in trust for her until she is 18 and then transfer the charge into her name.
3) If Freya dies before you then I will not call on you for repayment of the charge, and you can have a lifelong security to stay in the house.
4) If you and Freya want to move house, the Legal Charge on Bradford Road must legally be discharged but I will agree to a similar mortgage being taken out on the house you move to as long as:
a) You pay the legal charges for the this process
b) The move does not take you out of UK Legal jurisdiction
c) The charge is not put into jeopardy by adding another mortgage or another person apart from you in ownership of the property.
5) If you move house and a similar mortgage is taken out on the new property then the commitments in this letter will apply to the new mortgage.
6) If I die, my Will will instruct my executors to follow these commitments.
Suite 7, 3 Edgar Buildings
I agree that :
1) The commitments in your letter dated 7th March 2013 are satisfactory to me and no other commitments by you about the house or the mortgage are implied or unstated.
2) That I will take full responsibility for maintenance and insurance and legal costs on this house (170 Bradford Rd) or any house in the future on which we agree a similar mortgage.
3) That, in the future, if Freya needs the money held in the charge that I will either repay the charge if I am a position to do so or positively support the sale of the house in order to repay the charge to use for Freya's benefit.
Ifyou still owned the house all you needed to do was simply transfer the house toFreya (to be held on trust. If necessary, until she is 18) but grant Marie theright to live in it for life or until she no longer wants to or cohabits inthis house or another or remarries.
Atthis stage in time, she owns the house and you have a charge on it which itappears finished in 2015, although why there was a time limit on it I have noidea because it appears that there was no obligation to repay it in any event, or was she supposed to repay in full in 2015?
itis very difficult to answer you with any degree of accuracy without knowing thecontent of that legal charge.
Canyou please confirm that your interest is simply the charge and how you proposeto keep the charge extent from 2015 onwards if Marie does not agree?
Thefacts appear to be a bit confused because you say that you transferred thehouse into her name and you have a charge, but then you say that she wants youto waive the charge and transfer the whole house to her.
So,which is it? Whose name is XXXXX XXXXX in now. How much is the charge for and whydoes it finish in 2015?
The house is now totally in her name. I have a £230,000 charge on the house.
before we did the deal the house was in my name but now I only hold the charge.
It finishes in 2015 because she agreed originally to either sell the house and pay me the £230,000 or pay me the £230,000 by that date. At that time, I needed the money to get on with my life since the house represented all my capital. I agreed to give her four years to arrange things.
Now I have inherited a house, I no longer need to get the money out of the house and my priority is to:
1) Secure Freya a home for as long as she needs
2) To secure the charge for Freya's future use
3) If it doesn't conflict with the (1) and (2) to give Marie a sense of security.
The Legal Charge does set out a repayment scheme (£300 a month for four years and then a lump sum at the end of the term) which Marie has not kept to and I have not enforced.
Iam going to give you the legal solution which is to transfer the property intoyour sole name again and then do what I suggested earlier.
Nodoubt, she will resist transferring it into your sole name (or even jointnames) because she thinks that she has some kind of equity in it (I don't knowwhat it's worth), in which case, you can threaten to make an application tocourt to force a sale of the house unless she agrees to transfer it back to you.I appreciate that you may not want to do that, but the situation you are in atthe moment is that you are the charge on the house which she has not repaid andthat she does not want to repay and is not going to repay. Ignoring the 2015date therefore the charge is going to remain.
Youcan assign the charge to Freya, but unless Marie agrees to grant some right toFreya over the house, then you are faced with court action.
Itis a pity that you had not taken legal advice before you transferred theproperty into her sole name.