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.

The problem isn't just when they die.

It would be a problem when one or both of them needs more care and they have to move out. If you can't sell it quickly, their money will be paying M&S instead of their care.

I don't know how it works with council funding if you own a M&S properly.

If their paying service charges and have their money tied up in a property they can't live in, they might have to go to a care home that isn't ideal for them (IE makes it difficult for the other one to visit). Whereas they might be able to have a nicer life for all of the rest of their lives if they rented a property instead of buying and tying their money up.

You can't be liable to pay if you don't agree to it. Ie. your parents can not contract you to paying the fees after their death if their estate runs out of money. If you don't sign anything, you are not liable.

I assume they might be able to take a charge on the property though so if you can't pay the fees then they can claim on property (which would be part of your parents estate).

Before probate the Estate pays. After probate, whoever has inherited (and therefore owns) the property will pay.

If you parents need expensive care and use up all their cash so that the only estate left is the MandS flat you will need to pay service charge until sold as people have said this can be difficult (just have a look at how many are in the market). Even if they have cash left when they die my understanding is that bank accounts are frozen so you would not be able to use them to pay the service charge.

If you inherit a leasehold property, you generally inherit liability for the service charge connected to the lease. So once you actually inherit the property you also inherit the liability (depending on the terms). To avoid this you’d need to disclaim the inheritance. It’s not as simple as saying you’re not liable because you’re not party to the original contract- some obligations attach to the interest in land itself. For ordinary flats this is less of an issue because service charges, ground rent etc tend to be lower. It’s obviously much more of an issue for a retirement flat.

Would suggest your parents take proper legal advice on exactly what they’re acquiring before they go ahead.

Typically the charges are owed by whomever owns the property.

whilst your parents are alive that is presumably them.

after they die and before the property transfers to (again presumably you) the fees will be owed by their estate.

once title transfers the fees will be payable by the new owner (you). In addition to the property you may also inherit cash which you can use use to pay the ongoing fees. If there is no additional cash inheritance or it runs out then you as owner of property will need to find the cash from elsewhere until you dispose of the property.

When my MIL died at a M&S place the family inherited everything including the flat so had to pay the service charges for almost 2 years whilst we tried to sell it. We had to keep dropping the price until it sold at around 1/3 of the original price. If we had needed money to pay for residential care it would have been a big problem.

older buildings sell flats for much less than the shiny new ones and are probably easier to sell later.

It’s fine if after they may have to move into care at some point in the future - they have enough to fund ongoing service charges there while on the market &/or while one of them is still residing there AS WELL AS cover their care costs.
If selling it at a loss again doesn’t eat into their ability to pay for their future care, then it’s not an issue. Are you fully informed about their finances (not that you should be as none of anyone’s business but theirs but…) as care as you know is hugely expensive & may be easy to think oh if someone’s well off it will be fine.
Like others have said they don’t let you simply let it out (as this conflicts with their business model) so unless you sell it for nothing you will make a big loss. Obviously M&S ‘s service charges are not cheap. I think if both parents are still alive & together, it’s more sensible to downsize to a low commitment property that meets all their future needs to age in place , then they have far more flexibility. If it’s just one of them on their own I can see why a supportive community might be more beneficial. Obviously depends on their health too.

Presumably whoever inherits the property is liable?

I know this is my 3rd post on this, but if it's the 'future' aspect you're concerned about, you also need to look into care home/nursing home fees and if NHS partial funding is likely to apply. Also, what does the remaining person want to do, should the other one not be there.

Like I said, this is complex without knowing all the details.

It is THEIR decision to make. 💐

The idea itself is a really good model, but McCarthy and stone are con artists who will bleed you dry when your parents die.

Get them to move abroad to a similar set up. 5star hotel and nurse kee care and cheaper

If they buy and have a car and go on holiday, they’re not allowed to leave their car in their own bought and paid for space!

But can they force the inheritance on you? Genuine question, surely you have a right to refuse?

I understand that the service charges are high, hundreds of pounds a month so on their own like rent/a mortgage, which would diminish the value of the property itself.

But there must be so many of these properties available to rent, that other people cannot sell, that it would seem like a sensible idea to rent one so you get the benefit of the assisted living environment, but not the risks of ownership. It's less secure, but they could just move to another one, using a full service moving company should that happen.

I don't know the ins and outs of it, sorry. She was the only beneficiary of the estate so ultimately it made no difference to her

Yes, but you don't inherit until probate is granted, so if you're prepared to price for a quick sale or sell to M&D at their price, you could delay applying for probate and inherit the proceeds rather than the property

Well that might be a good idea if the money is the only concern and is more important to you than happy settled parents who you see regualrly in their old age. And it is their money.

I don't care if every penny they have goes into this. I only need to help my sister know that they won't come to us if parents'/the estate money runs out.

A friend of mine has a problem that she has inherited a home that she can’t sell and has to pay tax on her inheritance.

This is the thing. So many people absolutely certain it's a terrible idea who don't really know.

There's a huge difference between parents' money being spent on a place for them to live in comfort, even if some of that cost comes after their death, and their children being obliged to pay beyond any inheritance

My understanding is that one issue is that if your parents were to pass away and only had the apartment left (ie no savings), that the person who has inherited the apartment is now the owner and liable for any charges until the apartment is sold. There was an article fairly recently about a woman who was in this position, and she wasn’t allowed to live there herself as she was a few years younger than the age limit for this particular block. I don’t know whether this is a common situation or not.’

But isn't this the same situation that if you inherited a normal flat that service charges paid until sold ? Is it because they are hard to sell ? Why is this - an aging population would surely like this ?
If your parents spend all of their money servicing their lifestyle so what . That is what it is there for.

But you can’t sell it until after probate has been granted because until then it’s not yours to sell. If you inherit the property, you are liable for the charges out of your own money. There may be some money left in the estate, which would also presumably become yours. But once you have that inherited money, it’s just yours, not separated into estate money and your personal money. If there’s no inherited money, you are still liable to pay the charges.

The executors can sell.

Exactly my thoughts...but people want to comvince me it will cost me rather than them.

It depends how much accessible money was in the estate. You sometimes can't get at the capital until probate is granted and they may come after the family if you can't pay it. If they do get one then make sure the will is written to look at all eventual outcomes too. If they will their cash to someone then it won't be there to pay the fees and the fees will need to be paid when the flat is on the market

But even then, the worse case must be that the flat is forfeited to pay the debt? The debt is owed by the estate, not the children.