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Nightmare property charge situation with PIL(17 Posts)
Stick with me on this one.....
15 years ago DH and I bought a derelict property with an annexe as a project to work on and live in. We sold our house and got the necessary mortgage. As the way these things go our costs escalated and got to the point where we didn't have enough to finish. After speaking to in-laws they agreed to lend us the money on the proviso they live in the annexe. Against my better judgement we agreed. At the time I couldn't see any alternative.
So they moved in and a 2nd charge (as a percentage value) was placed on the house to protect their investment; rightly so. The terms of the charge is that on their death 2/3 of the investment is payable to BILs (with 1/3 going to DH). Again naively didn't consider this as a real issue, they would be around for years and some sort of agreement would be reached with BILs.
Well what a fucking nightmare the whole thing has been. My PIL are the most cold, self-centred, controlling people you could ever have the misfortune to come across. Even though we have a large majority stake in the house they try to control or cast judgement on everything we do. Every alteration to the property we've made, they've tried to block or at least cast judgement on. It's never said but there is clearly a huge undercurrent of resentment that they lent the money. We live in a beautiful part of the world and they have a gorgeous house, with no bills or maintenance to worry about but never once have they said they enjoy living here.
things originally came to a head about 8 years ago when I was so sick of them and the financial burden hanging over our heads that we put the house on the market (as we have legal ownership we have the right of sale). Of course this ran smack into the recession so the house didn't sell.
Anyway relations have become horribly strained again, so much so that following a huge row between MIL and DH (where they refused to give us a spare key to their house before leaving on a 3 month cruise) we decided that the only answer is to sell up and go our separate ways. Better to do it now rather than later as they are both in their mid 70s.
So we put this to them last week, although it was angled that our main concern was future money problems. Well, that opened the floodgates.. how could we do this to them at their time of life...don't we know how ill they are (deaths door for last 20 years!)...they'll never be able to afford anywhere else (untrue unless they want to move to Buck Palace)..how ungrateful we are for everything they have done for us etc etc...
I had to seriously bite my tongue as didn't want to make matters worse; also appreciate it was a shock. But as far as I'm concerned I just want and need for my sanity to get out. Very tempted to tell them if they hadn't been a pair of such a fucking mentalists it might not have come to this, but anyway.
Anyway they have spent the last few days obviously thinking things over and have told (not asked!) us that they want us to pay their stamp duty on a new house; likely to be about £8k!!!
Bizarrely and given the volatile relationship DH has with them he feels an element of guilt that we are "forcing them out of their home" and thinks we should pay it. I think they should go swing! They have done very well from their investment, more so if they had stayed in their previous house and have not contributed another penny to the upkeep or maintenecance of the property.
Guess I just needed a rant and this hopefully short period of hell will come to an end soon (please God let the house sell quickly!) but in the meantime would appreciate any words of advice from a legal expert or someone who's been through a similar experience. I truly regret ever entering into this arrangement with them but for DCs sake hope that some sort of relationship can be maintained.
£8k sounds like a small price to pay to get them out of your pockets.
Never lend/borrow money from family or friends!
Was a contract drawn up about them being able to live their (rent free? In perpetuity?)
They weren't unreasonable to say how they wanted things built/finished in the annexed if they were going to live in it, I think. However, it all sounds so acrimonious.
If you sell (both properties?) how much of a hit on your budget us the stamp duty?
Couldn't agree more Undersmile
To be clear, it's OUR house and garden they try to exert control over; their annexe has been finished exactly the way they wanted it.
They have asked for a meeting with us and am sure it will be to reassert their demand we pay their stamp duty. On reflection I'm thinking it may just be easier to at least pay some of it on the understanding the sale is made as smooth as possible.
Yes it has become very acrimonious but it was always going to come to a head at some point. I'd rather take the pain now than have to deal with the situation when they are properly infirm and require care
Stamp duty is likely to be about £8k for them and approx £16k for us!
I think it might be worth paying as they might have reasonably not anticipated having to move again, but alongside a letter from a solicitor saying that is in final settlement. Better still, seek legal advice anyway.
There is an article on the Guardian somewhere about a similar situation and i think that the person who invested was entitled to their investment back plus interest on that amount.
I think you are doing the right thing btw, better do it now than have the issues cascade down to BIL.
They have a percentage interest in the house which in effect means they will do very well from the sale.
Yes however acrimonious it is now I can only think it would be 10 times worse to leave it until they die. Under the terms of their will we could quite easily be forced to sell the house to pay off BILs. Sadly they have no concept of how horrendous this scenario is and seem to think we could just magic money to buy BILs out.
Is it a completely separate annexe? Could you separate the legal titles so that the main house is sold separately and they can stay in their home?
Is the annexe a separate building? Would it be possible to just sell that and pay them back?
As an aside, I don't see why you had to have the key to their house while they were away. I mean, it would have been sensible to enable you to keep an eye and in case an emergency arose, but they were entitled to say no without it being a big deal.
Sounds acrimonious on both sides, and you would be well rid to move into two separate houses. Absence makes the heart grow fonder, after all.
If they are going to do really really well out of the sale, though, do they need you to pay their stamp duty or are they just asking in order to be difficult?
Classed as one dwelling with shared access onto the plot. It couldn't be split off.
It did cross my mine that maybe we could buy them out, but not only would that that mean a ridiculous mortgage but also how is there any polite way of saying "you've got your money, now leave!"
Simpler all round if we sell up and start again.
Olennas, we pay the buildings insurance. If something happened in the house while they were away eg burst pipe, guess who'd be responsible for sorting it!
Also they have a key for our house!
So- and forgive me if I've taken this up the wrong way - you have to pay them back the money you borrowed and they have also been living cost free since they moved into the annexe? Did you have any legal contracts drawn up at the time? Would you qualify for a higher mortgage or a bank loan to cover the amount borrowed, pay them back and use the annexe as a rental to cover the mortgage increase?
As they are resident in the property they too will actually have to sign the contract of sale to give their consent to leaving the property vacant for a buyer so you do need to keep them onside so I think probably the best way would be to agree to paying the stamp duty (as this was an expense they thought they would not have again if they anticipated seeing out their life there).
It would probably be the easiest way to get their agreement but I would get an agreement drawn up to say you'd pay stamp duty limited to £8K in case they go for something more expensive.
Classes as one dwelling how though? It might be possible to split with the local authority planning permission and splitting the legal title
Shared access can be dealt with through rights of way
If they have their own front door I would think it's possible legally, have you definitely checked all avenues that it's not possible
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