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.

Given your DPs quality of life is your main concern (which certainly seems to be the case given you're ready to forego your whole inheritance), then the much bigger issue is that of your DPs going into care.

Whether you can limit your liability by refusing the inheritance or delaying probate is neither here nor there at that point. Imagine the stress and hassle of not being able to sell but needing the money for their care? This would not be them "living in comfort" at all.

There are other companies apart from M&S. My FIL bought an already lived in retirement flat in a complex. We are yet to sell it but hope to make back approximately what he bought it for based on what others in his building have sold for. I don't think that's possible if you buy new and especially not M&S because there are so many available. I did lots of research at the time and M&S was a hard avoid.

I would widen the search and see what else is available, and avoid new if possible.

Legal charge can be put on the flat for care home fees until property sold, like any property can't they?

Yes. A charging order can be applied to any estate/person or property - on its sale.

But you wouldn’t legally own the property to do that surely? Unless they put it in your name to start with?

The freeholder (M&S or whoever) can’t come after the beneficiaries personally for the charges. If there are savings forming part of the estate, then they would be used to pay the charges until there is nothing more left.

This means the estate could become insolvent, as a worst case scenario, but the beneficiaries are not personally liable.

i’m a property lawyer, so deal with these a lot. The charges are high and you pay an exit fee as well as the estate agent’s fees.

Would i recommend buying one? Generally speaking, no. Renting would be an alternative worth exploring

Better to rent IMO, they are very difficult to resell and you'll have to take a fraction of the original price IF you can find a buyer as there's a limited pool of those willing to pay the service charges. I can see there's a need for this type of accommodation but this model seems dodgy, overpriced and underregulated.

Get them to look at some second or third hand retirement flats, do they want to buy them? If not why not? Because that is what you’ll be dealing with after they’re gone, they’re almost unsellable.

@Purpleandping would your parents be happy to rent? It may be easier to disentangle from the contract if your parents need to move on (although like many, I have no experience of renting one).

As I understand it , until probate has been granted and the executors legally confirmed the assets are frozen.

Selling them is a nightmare. I wouldn't buy one, people think they will be great as they have activities and goodness knows what else but selling them on takes forever.

A lot of people have recommended renting rather than buying. Is there are reason you are ignoring their comments?

My mum is in similar. I’ll inherit nothing but I don’t care. She has friends around her who look after her. She has a community with coffee mornings and fish and chip suppers. When she is ill people pop in a check on her and do bits of shopping. She has a cleaner who does other apartments and now does hers. There are carers who I will be able to ask to help her if she needs it. My life is infinitely easier, more importantly she is happy.
If you care about your elderly people do it, if you care about your inheritance don’t.

I'm not ignoring anything, ultimately it won't be my decision. My (sister's) query was specifically about them buying.

I've heard stories of them (and similar providers) getting complacent once the flats are all sold and stopping providing many of the advertised services or no longer caring about the quality and consistency of the service provided.

That would bother me more than the loss of inheritance,

Bear in mind that it’s not like being in a care home - my MIL lives somewhere similar and there is a manager but she’s only there 9-5.

Luckily she’s independent but there are families who move their elderly relatives in there expecting some level of care that just isn’t there.

Also I echo what others have said about the financial side of things - they’re not easy to sell on. Maybe a small bungalow close to town would be more sensible, and sort out things like a cleaner/whatever extra help they need.

At the development my MIL lives at, the maintenance costs have to be paid when the flat is up for sale, but not upfront, they are taken out of the sale proceeds.

I’d say do it if it’s right for your parents but for god’s sake, rent don’t buy. My DM died over three years ago; we’re still saddled with her flat, which we can’t sell for love nor money (she bought it for £380k in 2019. It’s now for sale for £150k, with absolutely no one interested). In the meantime, MS are charging us over £1k a month in service charges (deferred until we sell the flat but if we sell it and it doesn’t cover the amount we owe MS, we’ll be liable) AND we’re paying double council tax as it counts as a second home. Like you, I don’t care about the money — it was my DM’s — and the move was right for her. I DO care about the potential debt and I have sleepless nights about what we do if we can’t sell the flat. There’s £2k left in the estate but with council tax at £500 a month, that’s not going to last long…

This depends on the place. My DM’s place has somewhere there 24/7.

My MIL lives in sheltered housing, not M&S. A block built in the 90s so bought second (third/fourth/fifth???) hand. I have always been told that the service charges need paying after death. By the estate. However my MIL has very little actual money so I have assumed that when she dies, once that is gone, we will pay and reclaim from the resale value when it ever sells.
However, we don’t care if it sells for £10k (as in, we just won’t leave it on the market for long) as she has so far had 9 years there which she has thoroughly enjoyed and has given us great peace of mind.
M&S might be a specific case but I think for some people these flats can be absolutely ideal.

I think it’s a bit of both?

My dad is very keen on moving to one, so I’m currently doing the same research as you. As far as I know, it’s when the property is empty that the charges start to eat up the remaining estate, and then when that’s gone the beneficiaries of the estate will become responsible for the ongoing costs.

Depending on the development, they can be extremely difficult to sell (especially as M&S are on a continual building cycle churning out brand new properties) unless you’re prepared to let them go at a fraction of the buy-in price.

The only alternative is to rent out the property (which is subject to all the M&S restrictions, so not necessarily easy).

My worry is that if he needed to go into care at some point in the future, all his capital would be tied up in an unsellable asset, which would mean the costs of both his care and the charges associated with the empty M&S flat would fall to DSis and me, which would be completely unaffordable.

My experiences. My grandparents bought a brand new one in ?2002 and had a very good 7 years there. Grandad in particular really benefitted from finding male friends/company.
When they passed away, Mum had it redecorated, replaced all the flooring and kitchen appliances with new. It sold for more than they paid almost immediately. But this was in a town centre where there were not that many retirement developments.
My mum moved near us on the South Coast in 2021. There is such a huge over supply that you could in theory buy them for buttons. I found one that Mum could rent for £850 a month. She only paid council tax and electric in top. Sold her modest house and stuck proceeds into the bank. This meant that when she needed to go into care 4 years later the money was readily available.
The top notch care home she is in now said that they don't include such flats as a factor for affordability as they are so hard to sell and sometimes worth very little.
My only word of warning would be at that point.

You cannot assume responsibility for another persons debt in this country. If someone dies, leaving a property that’s unsellable and accruing charges - then if you are that persons executor and heir and you decide to take the role of executor you have see it through to the end.

The charges are £100 a week in the ones I’ve dealt with. And you can always sell a property if you stick it in an auction or sell for a bargain price…

Following others here - renting is a better idea as renouncing the role of executor means you do not get to close your parents affairs down. You don’t get their personal effects if the estate becomes insolvent… it’s a bit of a can of worms.

if you don’t take the grant of probate then a creditor can but that just sounds awful, even if you aren’t dealing with it. It would take years and it would always be handing over you, not something you want.

The most important thing here is your Mum’s happiness and comfort. If there’s plenty of money available just do it. New M& S apartments are overpriced so get a secondhand one if you can - there’s usually loads for sale. My aunt absolutely loved it and regretted she didn’t move sooner. She had been lonely and after the move she made friends and had loads of activities arranged whilst retaining an independent life with her own front door.
when she died my sister and I sold the flat and yes M& S take a percentage but it was her money not ours.
As long as you go in with your eyes open and accept the financial cost you won’t regret it.
Btw, to speed things up we did Part Exchange in her house but time is of the essence and money isn’t everything.

Just don't. My mum died three years ago and it's been a complete nightmare. No one will wait for the property to sell to claim their bills 'from the estate'. If you can't sell it, essentially there isn't one and you have to find the money once probate is granted. Council tax still has to be paid. The exorbitant charges from the various management companies still have to be paid. It's been a living hell. I'd advise your parents rent one instead.

My friend’s parents really wanted to buy one. They wouldn’t listen to advice from my friend or her siblings. Eventually they listened to a solicitor, who thankfully pointed out the huge financial loss that their kids would eventually face, as well as legalities. So they sold their too large property and bought a two bed bungalow near my friend. It has worked out very well, the money they save on utilities running a smaller property pays for a cleaner and gardener. Thankfully it worked well and my friend is very relieved they made the right decision.