McCarthy and Stone apartments. What's the worst that can happen?

[Purpleandping]

This living style would suit my DPs and remove the burden of supporting them in their overly large house from me.

From my POV, I don't really care if it's a poor financial decision. It's their money and should be spent on a comfortable life.

My sister, who is a good person, but lives a long way away so isn't involved in the day to day of it, is worried that "we" will have to continue paying charges after their death, if it doesn't sell.

If it's the estate that would pay, I also don't have a problem with that. If their whole estate is swallowed up in paying for this place, to give them a decent life now that's OK. Obviously it would be better if it wasn't but if that's the worse case, that's OK.

DSis is worried that once the estate is spent, the charges would fall to personally. Can that be true?

So, whilst it will ultimately be DP's decision, I'm comfortable if, worst case, all their money is spent, leaving no inheritance, but I wouldn't be comfortable to think I'm committed to paying out of my own money if things were very protracted.

My friend has bought into a similar development near us but it is already 20-odd years old so buying price was reasonable, and crucially there aren't many like it nearby so they do seem to be reasonably quick to sell. Her flat is actually pretty nice even though not super shiny new.

Maybe because we're in a low house price area we haven't been targeted by a glut of overprvision , which I think is what leads to resale being so difficult

my friend's mum bought one and she inherited it.

Impossible to sell and a drain on her money, but easy to rent out for income, if you can be bothered with the hassle.

Presumably they could sell to M&S though, but they're holding out for what they hope to get for it?

When you say "they" have to pay charges, presumably that's the parents or their estate, not your friends?

A drain on her money or the money she hoped inherit?

I was trying to work this one out because it's likely I want one in the future for myself

I think what happens is this -

Through probate, the service charges will be taken from the estate

After probate, if you've inherited it, and you've agreed to that, then technically you own it. That's the point where you become liable for the very high service charges. And if you can't sell it, you'll be stuck.

I think you can refuse an inheritance I don't know what happens to it at this point

My late father looked at it and decided that he was too worried about landing me with a bunch of bills. If there's a renting option, I would take that but then of course your parents will be at the same risk as any renter I suppose.

But it could end up costing you. Above that amount if you can't shift it. If it was just their money down the drain then fine but it carries on after they've died.

It may actually be her money though? Not just the estate. If there is no sale and you need to pay charges, then where does that money come from?

(I do not know the T&Cs so no idea if they cover the charges and take it from the value of the flat if that is even a thing)

OP, I think you’re only looking at this from the point of view of inheritance. There are all sorts of scenarios where having funds tied up in an unsellable flat will be a problem, eg one of your parents needs nursing care and they would like to use some of the value of the flat to pay for better quality care than state provision, or they want to move closer to family as they get older, or they just don’t like it.

I’m annoyed for you OP that no one seems to know the answer to this quite simple question! 🤣

I think it would be in the terms of the contract which nobody on here knows as it is not our contract?

These flats seem to be thought of differently where I am in Scotland. My mum bought one for £101k and lived there happily for 6 years until she died.

When it went on the market, it was put up for sale on the Thursday, we had 2 viewings on the Friday and they both put offers in on the Monday morning. It sold for £119k (in 2023). They are incredibly popular flats here, always selling really quickly.

Yes we still had to pay the service charge after she died while we were waiting for Confirmation (Probate) but it was only about £120pcm.

We did have to pay 1% of the selling price after the flat was sold, but we knew that.

I would look at alternatives and then make an informed decision - but it's not your decision to make - it's the person who may be living there.

In principle, they are wonderful - as close to perfect that assisted living can be.

For the the person living there - amazing - and that should ALWAYS be the priority.

BUT it is a massively different situation if that person then needs to go into a nursing home or passes away.

You will not be personally responsible for any incurring fees - but the estate will be.

Read any documentation thoroughly is my main advice.

I am reasonably sure I've answered it

Okay, maybe 80% 😂

I would bet My ice lolly on it put it that way!

A factual answer may emerge if you ask this to be transferred to the legal section.

basically you haven't signed a contract with the company to pay service charges. So they can't come after you surely

But after probate the ownership will transfer to you. That's the point where you would sign a contract saying you pay service charges. So people who are saying "I have to pay these personally" have presumably come up to the point of probate and are now the owners of property. Which they'd have to be in order to sell it.

Both. She had to pay a hefty service charge when it was on the market. (She still has to now, but it's covered by the rent)

https://podcasts.apple.com/gb/podcast/merryn-talks-money/id1654809850?i=1000719587384

This is worth a listen.

One route they could explore is buying with an option to sell back at a given price. Not sure whether M&S do this but I think some providers do so worth asking about.

Yes, but was that her or the estate? I'd expect her to pay it now, as she owns it. But while the estate was trying to sell it presumbaly the estate was paying charges?

Yes, that's what I'd expect to happen, but transfer of the assets/probate could be delayed until after the place is sold, even if that's back to M&S for very little?

This is an issue.

You, and they, may care that the £250k is gone forever if that money could have been used to fund better residential care.

If they would still have sufficient assets to cover residential care anyway then this isn't such an issue.

I am a Social Worker and having worked with older adults, I wouldn’t touch M and S at all - although developments may differ. The issues that my residents and families faced- the so-called 9-5 warden leaving and not being replaced, but service charges remaining the same. Not allowing key boxes outside which was challenging for carers and other professionals when residents could not answer a buzzer. Lounge unused. Residents complaining if another person development dementia and , for eg, wandered. M and S would try to manage the person out, but they would own the flat but not reach the eligibility for a care home. And yes, the selling issue. A friend’s mum died 3 years ago, flat still not sold, price v low and most if not all of what they receive will need to paid to the LA in back pay - she had to go into a nursing home so the LA paid pending sale of property - and they charge interest. So whilst my friends are liable for the service charge and are not allowed to rent the flat which is depreciating, the debt with the LA grows.

Having said that, we have an awesome HA provision in our city- flats can be rented or purchased. Not as swanky and cheaper. Staff are experienced -
normally 2 working 9-5. Pop round and see people. Onsite cafe serving breakfast and cooked lunch at decent prices. Staff will collect residents from their rooms if liked. And an in house care team at an extra cost. Because they are highly regarded, the properties sell pretty easily.

so that’s my experience.

You can delay applying for probate.

(The situations are so complex it's very difficult to cover every scenario without having all of the details OP. The most important thing to do is to read everything at every stage).

I don't think you do need to know the terms of the contract to know that someone who wasn't a party to it can't be liable for it....and yet people seem convinced that you can.

Which I think is because people confuse their parents' money, which they expect to inherit, with their own.

They will never cost the families any of their own money, they can only bill the estate so worst case there’s nothing left to inherit. One of my grandmothers had a very comfortable and enjoyable old age in one of these flats, after my grandfather died. They’re not for everyone, and sometimes the beneficiaries (or potential beneficiaries) can get hung up on the cost. I’m with you, you’re paying for a comfortable old age when you buy one of these places - they are not and never will be an investment.

But people have said they know people who have had to pay from their own money. It probably depends on individual circumstances which we do not know.

As you say, you think probate can be delayed till after a sale which might be true. If it were me I would need proper legal advice to confirm that, unless you are a lawyer yourself maybe.

There seem to be a lot of people who have felt trapped by these sorts of properties, and I would tend to listen to that. You seem to think they're all just be greedily clammering for their inheritance or have missed the point somehow

You will find it impossible to sell aftr your dps have gone and you will be liable for extortionate service charges indefinitely.
This topic has been discussed at great length on MN and elsewhere.

M and S won't buy the property back. This is one of the things most complained about. The service charges are a nice little earner.