to be disgusted at having to pay fees for a deceased family member

[LK2610]

I’d really appreciate any advice you can give. Our lovely grandad passed away 1 year ago. He lived in a block of ‘supported’ apartments for the elderly. Unfortunately my parents are struggling to sell his flat due to the slow housing market. It’s been empty for almost a year.

The thing that shocks me is that my mum is still having to pay a full monthly service charge for the apartment, even though it’s empty. It’s costing hundreds of pounds a month and soon my grandad’s estate will have run out of money. The building managers refuse to let my mum have a discount on the charges, even though half of the things my grandad obviously can’t use.

This charge includes things like water, electricity, TV licence, daily food in the restaurant, cleaning, 24/hour support, emergency call system - obviously he’s no longer using these things.

She’ll also soon have to pay full council tax on the flat because she can no longer benefit from the 1 person discount because my grandad is no longer here. This shocked me the most. It feels so insensitive, like a punishment for him not being here.

I’m sad that she’s being forced to pay all this money at such a difficult time (she’s still very upset) that she and my dad could have, as I’m sure my grandad would have wanted.

Has anyone else been in a similar situation? I’ve suggested she gets legal advice but that’s more costly and she’s in her 70s so it’s quite stressful for her.

These are the conditions of the contract your Grandfather would have signed up to. Paying full council tax on an empty property is standard. To sell your parents need to drop their price to push a sale through.

No councils only do that if property is in such a state of disrepair it is uninhabitable.

Makes you wonder doesn’t it? Some of these flats must reach a point where the estate can’t pay any more. We need a Panorama programme on it!

Would you not even get a 25% discount on CT considering no one lives there let alone 1 person

You'd think. But it isn't the case. The market for these places is so small, that they jiust don't go. I have friends who were stuck with them for years, despite having them up for a third of their value. In a local small block like this, six of the 12 flats are for sale, and at about half their value or less, in a very desirable little market town that older people love. Some of them have been for sale for at least two years. A new Macarthy and Stone village has just been completed in the same town, which doesn't help.

I would never, ever buy one of these places and land my children with the stress and costs after seeing what my friends had to go through.

Another scam the Tories don't care about.

It is common for all flats, if an owner dies the estate is still liaible for the service charge. The only difference here is due to all the additonal services provided in retirement blocks the service charge is a lot higher.

In our (standard, non retirement) block we do sometimes agree to roll up service charge debt and agree to it being paid in one lump from the proceeds of the sale of the property.

They take you to court if you don't pay apparently.

I was reading about a woman who had inherited a flat with a £50,000 mortgage still on it, she couldn't sell it, was struggling to pay the fees and if she auctioned it then they couldn't guarantee that it would sell for more than £40,000 which was the highest reserve they'd put on it - and wouldn't even cover what was due on the mortgage.

If there is not any cash in the estate or other saleable assets i would recomend that the executor get legal advice asap so that they themselves dont become personaly liable if they have made any errors in managing the process.
The contract needed be examined to establish how much control the other party has over how the estate manages the property eg if the agent has to go to court to stop a sub-let or it they are blocking offers etc.
They should be stopping all payments made by others on behalf of the estate including the fees and write to inform the other party ((not the agent) there should be an official address clause in the contract ) that no further payments can be made as no cash /money left and that they will have to wait get paid from the sales proceeds.
Record the payments made by the family as a debt due from the estate.

Worst case will be the estate gets taken to court by the other party and the property is sold to meet the debt owed and any money left is paid out to family. This will take time.

The sale will be the other parties problem too (its is what is happening anyway and the execs can prove that they are not stopping the sale process and that the other party choose to stop the sub-let which would have covered fees)
In the short term the agent is now vested in solving the cashflow issue of no fees and not be obstructive in the sales process.

NB Use the stopped fees to pay for legal advice.

Not necessarily. These retirement properties are notorious now and many people understand that owning one is like burning £50 notes. I’m in the target demographic for them and I don’t know anyone who’d accept one as a present.

For deceased properties you get an exemption from the date of death until 6 months after probate is granted.

The Sunday Times did quite a long investigation on it. That's why I sent it to my MIL when she was looking at a McCarthy Stone house near us. It's thecsecond large McCarthy Stone development onnthe same road. I don't know why they keep getting planning permission for them. One of the reasons we had reservations anyway was that the services in the area would have to deal with a huge influx of older people needing care. Probably enough for an entire doctors surgery of patients, but none planned.

This issue has been raised on the Money pages of The Times recently, although I have certainly seen them promoting these developments in the past. I think it is a case of Caveat Emptor and your mother will have to drop the price to sell.

Unfortunately the service charge does need to be paid.
I would consider reducing the price or renting the property out to cover all the fees.
Sorry for your loss.

Not to do with being supported, going through this with my mum's house - I have to pay all the utilities and the council tax until it sells, as I am the executor.

Luckily, there is enough money in the estate to pay me back but that can't happen until after the house has sold, which can't happen until we have probate, which can't happen until I've estimated and paid the inheritance tax, which will be c£40k and which I have to pay myself which I can't, so I'll have to get a loan.....I've never had a loan in my life so I'm a bit pissed off about this!

Yes

It doesn't seem fair that you have to pay IH upfront. Why can't you sell property first

This isn't exactly broadcast either so people have a nasty shock

I can understand that this is a difficult situation.
Charges do still occur or are under contract however and so would need to be passed onto the owner. Without wanting to sound cold, they are a business and they could charge that to a new owner and so will wxpect it paid regardless. In this case its the owner or whoever benefits from the estate as any charges incurred will need to be settled as part of it. It will sell at the right price even if it means you feel like you're giving it away. You have to price it to get it off your hands and stop the fees occurring.

In this case the woman inherited nothing as the persons personal debt is not transferrable. The law is all debts are paid out first and only then will there be assets/money left to inherit.
if its expected that there will be nothing left and still unpaid debts to be paid executives need to be very careful about which if any payments are made. The bank can go to court to forclose on the house anyway

OP, this is the reason that these flats are almost impossible to sell. It's not unreasonable or illegal. The cost of servicing the lifts or keeping the gardens neat and tidy or cleaning the communal spaces hasn't gone down now your GF has died. It's the same in any block of flats, for older people or for anyone else. There are fixed service charges and ground rent that have to be paid while you own the property. More and more people are reading the terms of their contract and deciding not to buy in retirement developments because of this — which is why your mother's having difficulty selling it.

Your mum will have to reduce the price of the flat (some of them around here have dropped from £100k from £40k before selling) in order to find someone prepared to buy. I've heard of people returning the lease to the company that owns the freehold and walking away — but some companies won't accept that. Check whether you have the option to sell.

There is an exemption from council tax after a death and whilst waiting for probate or sale (whichever is earlier). The duration of the exemption varies between councils but six months is the minimum and 12 - 18 months is not uncommon, especially with the long delays in probate and HMRC steps currently.

Service charges will be payable on any leasehold property but tend to be larger in apartment blocks with extra services - as you say its in the contract.

I agree they're a rip off. But, most of the things covered by the management fees are fixed costs which are incurred whether the flat is occupied or not. Any reduction to reflect the saving in marginal costs would be tiny.

It stuns me that people want to enter in to such arrangements, but that's another debate.

We had to do the same when my MIL died. I think its normal.

The company - a well known large chain of assisted living flats - also charged a cut on the sale price when we eventually sold it.

Hope this isn't true for you but they can be hard to sell too.

It's not a scam though, is it. The model is very clear in that you pay a monthly fee for numerous services and this is paid for the property irrespective if it is occupied or not to keep costs down for everyone. Part of the cost is potentially the asset loosing value when the person who needed the services either dies or moves on. The costs of these services if you lived in a non supported complex would be far more than you pay in them, as you are not sharing fixed costs and that would also depreciate your asset, or at least your estate in that you would be spending more cash per month. But you stop paying the more expensive costs when you die or move on to a nursing home.
So it's a choice. Pay reduced support costs in supported housing but your estate has to keep paying until your asset is sold at whatever it can be, which is for your beneficiary to sort out. Of you pay out more for the services and arrange them all but on death your beneficiary can stop paying and sell your asset relatively hassle free.
The first is weighed in favour of peace of mind and more disposable income for the elderly person because the services are arranged, but hassle for the beneficiary on death as the estate keeps paying until the asset is realised, the second the other way round in that the elderly has less disposable income, but there is no hassle on death for the beneficiary.
Elderly care is expensive and has to be paid for. It's how you do it.

I’m not sure what the problem is , your mum should be paying it from her fathers funds , if that has run out then the bill will just have to accumulate until the flat is sold and then paid from the proceeds .

Council tax is payable once you get probate.
Some councils charge double and even triple if a property is empty for an extended period. It varies but anything from 2yrs.