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Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33946
Experience:  I have been a solicitor in High Street Practice since 1985 with a wide general experience.
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Very complicated situation and am at my wits end. In 1999,

Customer Question

Very complicated situation and am at my wits end. In 1999, 5 siblings (out of 6) bought my Mum & Dad's council house (they were struggling financially in their old age). We all agreed they could live there rent free for as long as they lived. At the time Mum, Dad, and the youngest brother John, went on the deeds as Joint Tenants. Reason being Mum/Dad had to appear under councils right to buy, John only one living at home with no mortgage himself (never bothered getting an agreement, we all trusted one another!!!) We all contributed differing amounts to the mortgage. Mark, Lesley, Alison 20%, Lyn 10%, John 30%. We all agreed, in order to offer Mum/Dad some kind of protection they could always refer to the house as 60% owned by them (we arrived at this figure because the council granted a 60% discount to us when house was bought). This meant that none of us individually or collectively could do anything to the house without their say so. In 2010 dad died, leaving approx. £12,000 of debt behind. I wrote on behalf of my Mum to all the creditors that he was not a householder despite his name appearing on the deeds and I had to produce the "paper chain" showing they had not contributed to the mortgage and therefore unfortunately these debts must be waived. We had a meeting early 2011 at which John actually stated "you will never see your investment realised in your lifetime". This worried the rest of so in July 2011 we put together an agreement between ourselves to formalise the situation, in which the so called 60% to mum was mentioned but I put in the following clauses:-
*At the time of purchase it was decided in order to afford Frank & Brenda some security and independence they would always be able to refer to the house as being 60% owned by themselves (re discount) and 40% owned by "the children".
*This would ensure that no decisions regarding the house could be taken without the express approval of Frank & Brenda as they would always have a majority vote.
*This was purely a procedural exercise and did not refer to any financial considerations in the house. It was always known and understood that this was an assurance for Frank & Brenda.
This agreement was signed by all parties including John and Mum. In 2012, John married but stayed in the house with his wife (mum didn't receive any additional payment or housekeeping money etc.) nor did he seek anybody's permission as he constantly referred to the property as his house. This incensed me in particular as I consider if he makes it his marital home he should pay us all rent!
In 2013, my sister Lyn developed cancer and she wanted her name on the deeds to make sure her portion went where she wanted; as we all did, because the mortgage was reaching it's end. John flatly refused to do this, he consulted solicitors who told him Mum owned 60% which she has now been "persuaded" into going along with (she now 80years old but fully compos mentis) He additionally wrote we must all put in our wills that when we die, our share of the house goes back to the "family". Also the sibling, Vickie who never wanted to participate has effectively been told by John that she is now entitled to an equal share of the "60%". In Oct 2013 Lyn died; another of Johns comments at the time was "you cannot give money to a dead person!" Myself Lesley and Alison tried to get the monies paid to Lyn's partner. It was always understood that John had first refusal on the house because he lived there. We agreed on a figure of £7500 (proposed by John!!). Although not correct we wanted shut of the problem. It dragged on and on through 2014 pushed by constant and I must honestly admit threatening prompts by myself to resolve the issue. We tried getting unbiased house valuations, which John tried sabotaging. We tried getting meetings with Halifax to extend the mortgage which he cancelled with 24 hours to go. He finally offered Lyn's partner £5500 in August, approx. just what she put in! I stepped in and paid £14000 (House Price £90000 - 10% of the "40%" and from the 60% I secretly agreed with Mum- at her instigation, that Vickie should only have £2000 and the remainder split between the 5 others including deceased Lyn ie £10,400).
Myself, Lesley and Alison seem thwarted no matter what we do. I have consulted solicitors who tell me it will cost a least £20000 through the court process with no guarantee of winning as the agreement is ambiguous. Mum will not sign anything of substance for fear of upsetting John who she has to live with. We cannot evict him, as he insists it is his house because his name is ***** ***** deeds. I have tried to "buy" my Mums so called 60% but she refuses for fear of upsetting John. She says it will resolve itself when she dies but my fear is that's the worst thing that can happen, it leaves only Johns name on the deeds and we will get as little as he can get away with. We have tried persuasion, threats, deals but his intransigency is immense.
Submitted: 2 years ago.
Category: Law
Expert:  Clare replied 2 years ago.
Hi
Thank you for your question.
My name is Clare
I will do my best to help you but I need some further information first.
How much is the property worth and how much is outstanding on the mortgage?
Has your mother made a Will?
Clare
Customer: replied 2 years ago.

Property Is worth £90,000.

Virtually nothing outstanding hence the urgency to get something done. I would say about £100-£150, due to finish March 2015 but there is already more than enough in the "common" account that we all paid into over the years.

She not made a will that I know of. I'm also apprehensive that she could, or may have been coerced into one

Expert:  Clare replied 2 years ago.
Hi
With regard to the agreement which was signed - does it make it clear that the five of you are joint owners in equal shares?
Clare
Customer: replied 2 years ago.

Clare, Following are the relevant clauses from the agreement:-

*In December 1998 it was decided to purchase the property under the local council's Right to Buy policy. Valuation at the time was £36,800 and Frank & Brenda received a 60% discount.

*The main reason for purchase was for the chidren to offer financial assistance to Frank & Brenda as they were pensioners and finding the day to day finances a struggle. All the children were approached and asked to take up a share of the mortgage.

*Subsequently a mortgage was arranged for £20,000 with Alliance & Leicester Building Society and was split as follows:-

£14,720 (i.e. the discounted portion of the house value taken up by the children in the proportions below).

£5,280 (an additional amount taken up by Frank & Brenda to obtain a new car & reorganise their finances).

*Since all other children had mortgages, for simplicity it was decided that John should be the only member of "the Children" to appear on the mortgage. Frank & Brenda had to appear under the Right to Buy

but their purchase was strictly limited to the £5,280 detailed above.

*The £14,720 was taken up in the following proportions:-

Mark 20% (2), Lyn 10% (1), Lesley 20% (2), Alison 20% (2), John 30% (3)

*Lyn decided she could not take up the full share and settled for 10%

Vickie decided she could not contribute at all.

Mark, Lesley & Alison increased their share by as much as they could afford.

John increased his share to take up all the residue.

*Any decisions regarding the property (sale, renting, raising finance etc.) would be by simple majority using the proportions each child has, as their voting entitlement, as shown above.

Expert:  Clare replied 2 years ago.
Hi
That very clearly creates a Declaration of Trust that sets out the basis on which the property is held
However I am confused on one point.
Lyn's interest was 10% - £9,000 - why did you give her £14,000?
Clare
Customer: replied 2 years ago.

Because Lyn died in Oct 2013 and we had all agreed that in that situation the "in laws" money should be sorted within 2 months. John delayed and delayed and finally renegaded on the promise.

If he was insisting mum had 60%, I tried to appease him by going along with it. So I paid Denis(Lyn's partner) the sum I calculated as above (ie 10% of the 40% plus a fifth share of the 60%, less Vickies little bit) I don't know if this was a good idea at the time but Denis has agreed with me that he would give back any overpayment I make.

You see this is a fundamental issue that has me bothered. John insisted my mum had 60% purely to keep our names off the deeds yet he is now considerable worse of because he now longer has 30% of the total. He only has 30% of the 40% and he insisted the 60% be shared amongst survivors (he is the youngest). He didn't want Lyn to receive any of the 60% (in my mind, he will wait until another few of us die in order to recoup his losses - so to speak) Even when mum dies he will insist he now has 100% of the house and there is nothing we can do until he says so. Which means he will delay and delay and do nothing

Expert:  Clare replied 2 years ago.
Hi
Ignore that for the moment - we will return to that I promise.
If the property is currently worth £90,000 and Lyn's share was 10% she would get £9,000 - do you agree
Clare
Customer: replied 2 years ago.

Yes definitely - before this 60% nonsense

Expert:  Clare replied 2 years ago.
HI
Forget the 60% business for now.
I am still struggling to work out out you turned £9,000 into £14,000 - once I understand that I will be able to help!
Clare
Customer: replied 2 years ago.

Okay. Mum said she owned 60% (of £90,000 which is £54,000).

She realised that Vickie never contributed so she should only get £2000 (just for the sake of giving her something). That left £52,000 split 5 ways between Me, Lyn, Lesley, Alison, John = £10,400 each.

Then there is the 40% (of £90,000 which is £36,000) and Lyn had 10% which is £3,600.

£10,400+£3600 = £14,000.

Expert:  Clare replied 2 years ago.
Hi
Thank you - I do understand it now.
The good news is that the document that you all signed in 2011 is a clear Declaration of tRust setting out the shares in which you each hold the property and the signatures of your mother and Brother as the people named on the Deeds is proof that your mother was aware of and accepted that.
Your brother was correct on one point - whilst your mother is alive and wishing to live in the property then nothing can be done to force the sale of the property - or any change in the ownership shown on the deeds.
Nor was your sister's estate entitled to her share of the property immediately - her share should have remained in the house until your mother's death and then passed to her estate
Once your mother has passed on then you can force the sale of the property whatever your brother wishes - unless he wishes to buy out your shares of the property
His share is of course already greater because he paid £5,500 to your late sister's husband - making his share now effectively 36%.
There is case law which states that the contribution of the discount does mean that the owners have an interest in the property - but the clear agreements that were made mean that this is not relevant as your parents clearly always intended that "their" share of the purchase prices was to belong to those children who had helped with the purchase in the shares identified
This case is relevant as it sets out a number of the principles involved.
http://www.familylawweek.co.uk/site.aspx?i=ed128729
If your mother has made a Will purporting to leave her share equally between her children then there is a risk of expensive litigation to challenge the assumption of her ownership but the fact that she had made such a will could be taken as evidence that she signed the Declaration of Trust under duress
No such explanation could be put forward by John who is clearly bound by it.
The Property will have to be sold when she dies - the only issue will be how the proceeds are divided and has you so rightly say John has as much to lose as the next sibling - unless your mother has left her share of the property to him.
The most effective way to deal with this is for your mother to go and see a solicitor, alone, and make a Will setting out clearly whether or not she regards ***** ***** the property as hers - and f so what she wishes to happen to it
If she does do this she should take with her a letter from her GP confirming her mental capacity
Please ask if you need further details
Clare
Customer: replied 2 years ago.

Hi Clare,

Thanks for all this - if I could just make some observations/questions.

None of us are interested in forcing sale while Mum is alive, but once she has passed away, how easy is it and how costly? (assuming my brother wont do the honourable thing and he just squats there)

We know Lyn's estate needn't be paid but we put the clause in deliberately to avoid the unlikely situation where Mum has to deal with 5 or 6 in laws if all her siblings died.

John didn't pay the £5500. On my insistence,(I said it was derisory and insulting to my sisters memory) I asked my brother in law to refuse it and I paid £14000 as discussed earlier.

I'm a little confused on this next point; I've have had a quick look at the case law you attached; it seems that Mum does have 60% share because of the discount granted at the outset, despite her never sharing in Insurances, repairs, improvements etc. And this share keeps pace with current pricing. Yet you do say my brothers share increases to 36% (had he paid it anyway!)

My biggest fear is my own death (I have seen my late sister deliberately "cheated"). It seems that everybody gets their share as long as they stay alive, if they die they don't get their portion of Mum's share according to John, (not Mum) - unfortunately she has to go along with what he says. She lives with him and regrettably he is a bullying, control freak but that's another issue. Is there any way I can protect my share, and Lesley and Alison theirs? My Mum is 80, I'm 60 but she's lived a more restrained lifestyle than me so it's going to be touch and go.

Expert:  Clare replied 2 years ago.
Hi
Has your mother made a Will?
Clare
Customer: replied 2 years ago.

No, not that I'm aware of

Expert:  Clare replied 2 years ago.
Hi
Have you downloaded a copy of the deeds from the Land Registry?
Clare
Customer: replied 2 years ago.

My solicitor did about 2 months ago showed Mum, Dad and John on the deeds, no charges raised against the property.

Expert:  Clare replied 2 years ago.
Hi
OK - can you ask your solicitor if the property is held as as Tenants in Common or as Joint Tenants?
Clare
Customer: replied 2 years ago.

Joint tenants - probably the worst decision I ever made, but could not have anticipated this happening. I did all the negotiating back in 1999, talking to solicitors, council, surveyors etc. My mum and dad were a bit naïve, they only knew about council houses, so it was all left to me.

Expert:  Clare replied 2 years ago.
Hi
Was any written agreement also made at that time?
Clare
Customer: replied 2 years ago.

No nothing I'm afraid.

Expert:  Clare replied 2 years ago.
Hi
In that case, technically the entire house will pass to your brother on the death of your mother.
HOWEVER in this case that is good news as it means that none of the property passes into the estate of your mother.
Instead the terms of the Declaration of Trust will come into effect and the percentages are clear and you and your other siblings can apply to the court for the sale of the property - it is relatively straightforward and shoudl cost in the region of £500 to $1000
In the event that you or one of your other siblings dies before then his or her share will belong to the estate of that sibling - it is not lost and does not revert to the family
The case I referred you to is different to your case as there was no Declaration of trust - and in your case there is, so even if your mother had severed the Joint Tenancy and tried to leave "her" share to one or all of you it would mean that her attempt could be challenged
Clare
Clare, Solicitor
Category: Law
Satisfied Customers: 33946
Experience: I have been a solicitor in High Street Practice since 1985 with a wide general experience.
Clare and other Law Specialists are ready to help you
Customer: replied 2 years ago.

Hi Clare,

That has considerably set my mind at rest, I'm due to go in hospital in January and hated the thought of my wife being left to battle with this, should anything happen. (I know she may still have a fight on her hands, if I'm not around)

I have spent over 12 months and over £1500 with solicitors in the UK and have found out more in last 24 hours for a marginal sum. I really do thank you for your patience, advice and time.

Expert:  Clare replied 2 years ago.
Hi
You are welcome - I hope all goes well for you in January
Clare

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