Am I the only one that thinks this is highly suspicious

Totally. Even with a contract. What's in it for the builder?

He will claim ownership of the flats. It's pretty obvious what he is up to.

In the inevitable court case, his evidence will be 'why on earth would I defer payment unless there was something substantial in it for me? this little old lady very definitely agreed I could have ownership or shared ownership of one or two or all of the flats.

He's probably likely to be a good liar and more convincing than your mother and will win.

Don't let her use this man at all.

As you say, how does the builder benefit? He’s not doing this out of goodwill and how can he afford to do it? What does your Mum say about this?

Ever heard the saying “if it sounds too good to be true, it usually is”. There will be some huge benefit to him, as why else would he do it?

Also I’m not sure it’s necessarily a scam but there’s likely to be some sort of interest element added onto the costs so that she has to pay back more than the actual costs that might make the loan more attractive.

Putting the builder thing to one side for a minute I agree with pp that the plan doesn’t seem that great. She’ll basically be living in an HMO in her old age. Managing the tenants will probably be quite stressful- just by law of averages she’s likely to have one difficult one at any one time. It will likely make her own home a lot noisier. If she’s happy to live in a one bed I’d discuss downsizing and investing the proceeds.

Christ, I feel so stressed reading this. I hope you're okay OP.

Can you stop it in any way? Contact the police? I know that's extreme but this sounds like a scam to me.

Honestly the more I think about this the more
concerning it is. This is a scam. Has your mum got the start of dementia? (I don’t mean this to be offensive, it’s just a very extreme decision).

can you speak to the local police to see if you can learn more about him/if he’s known and dodgy and register her potentially vulnerable or something? Also extreme but just wholly bizarre.

I don’t mean to sound morbid….

How much will this renovation cost, what’s he quoted?

how much rent would she get for each of the properties?

How long will this work take?

if all rent is going to this builder to pay the cost of the build how many years would that take based on the figures above? She will still be paying the income tax on the profit she isn’t then seeing. That’s a cost to her too. Would she then be retired and not see any of that income but still be liable for any damage as she would be a landlady? She also has the additional insurance she has to fund without that added income to pay for it.

How will she fund retirement whilst all profit is still going to the builder? Whats the interim plan?

if she dies (sorry) before this is paid off where does this legally leave ownership of the property? If you inherit the property you’ll get inheritance tax and presumably still owe this debt. Can you afford to pay the shortfall.

I wouldn’t entertain this.

contractor put lien on the house
www.investopedia.com/terms/l/lien.asp

It’ll reduce his tax or vat fees so could be why! As long as she has an ironclad contract in place and gets full authority over the agrees to pay him the rent when it’s occupied rather than rent going to him etc

Please don't think I am being cheeky, but is there a possibility of dementia?
This idea is so crazy, I can't believe anyone would fall for it.

Do not do this and just tell the builder no yourself and block his number in your mum’s phone.

how will she get an income if the builders are taking all the rent. She will need to pay tax on the income and then they get it potentially tax free.

start power of attorney before she loses everything.
why not just sell the house and invest the money

DO NOT UNDER ANY CIRCUMSTANCES ALLOW HER TO DO THIS SHE WILL LOSE EVERYTHING !!!! She is being scammed and is too stupid to see it and she's going to lose the lot

Why on earth doesn’t she just sell the house, buy a smaller one for herself, and invest the rest of the money (with advice from a financial advisor as she sounds like my mum in terms of making terrible financial decisions 🙄)? It would quite possibly be more profitable and she’d have none of the hassle.

What’s going on here is that the builder will register a charge against your house (RPI interest rates) to be paid from the rent. If there is a death then he will own a portion of the estate and until that time he will get an income that your capital will be paying.

I'd be concerned about

1. costs being significantly higher than quote
2. dragging work out to get her to sell to him at lower than market
3. interest above market rate being included in the fine print of the contract
4. how your mum will pay expenses if all income is going to the builder
5. the term over which to pay not being defined and never ending
6. confusion over ownership of the property and potential registered interest
7. confusion over who will keep the profit if the property is sold. Would the builder be entitled to capital growth on top of the cost of the building work?

Your Mum needs to talk to a solicitor specialising in buildings etc. If she does this she needs to get a watertight contract written up by a solicitor (although I think any legal person would question the sanity of the idea).

She's going to be left with no home and everything signed over to this guy

Sounds mad to me. Pretty sure his quote would be the most expensive by a country mile 🙄
Why doesn’t she just downsize?

This sounds dodgy. Is your mum intending on living in the house during the building work? Afterwards? In a house full of bed sits? Has she ever been in a house of multiple occupation? Because that's what it'll be,and they don't have good reputations.
If she won't listen to you,can you be with her when she next sees the builder? She may not listen,but if he thinks that you know the score and are not going to be conned like she is,and may possibly become 'difficult',he may back off and look for an easier ride elsewhere.

Good luck with this,it was the potential to be a complete nightmare.

Money of course! Who knows what he had in mind, but you can guarantee he intends to end up owning some/ all of those flats.

Bedsits?

What kind of people does she think want to live in a bed sit?

The kind that move in and won't pay and will trash the place.

Your mother is being stupid and greedy.

I have family that are builders, they often end up with quite large amounts of cash that didn't go through the books to hide it from HMRC. I suspect the builder is planning to " launder" this cash by using it to pay for the materials and possibly some labour and then have nice clean rental income coming in. It sounds like the kind of thing my FIL would try but he would only involve family!
Don't involve your Mum! She might end up in trouble with HMRC! Or worse.

@Chewbecca after protracted, expensive, frustrating then daunting negotiations with planners, architect/s, builders, family have done this as you suggest, sold with hard earned PP, side garden, moved to somewhere which suits them better, fd up with protracted negotiations and abysmal offers, as though they would not know the value of land in Greenwich ! always people out there ready to rip off the unwary, this is not a new phenomenon

Exactly.
Is it likely that the plan is for the builder to add 3 ensuites so the house actually becomes 3 or 4 ensuite rooms with all the tenants sharing the downstairs dining kitchen /living space and separate parking spaces are created in the front garden?
Can you look on the Council website at the approved plans?
I know someone who lives in this kind of arrangement and is charged circa £800 a month to include bills and Council Tax.
It would just take about 15 minutes to do a quick spreadsheet for her and know for sure whether she is going to hit trouble fairly quickly.
Being a Landlord is not easy if she has no previous experience and has to keep finding people to 'fit' the house and do all the admin and money chasing.

Or sell the house with the PP for someone else to do the work.