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.

If the money runs out whoever is inheriting the estate has to pay.
You inherit debt too.

It's not too surprising that elderly people want to have these services in a supported environment if they think the alternative is a nursing home or having to pay much much more living in an independent home. All those saying it is a scam etc are those trying to realise a beneficiary asset. The fees won't go any further than the assets. So what they are saying is we can not get our inheritance and fees are depreciating it. What about the peace of mind and support the arrangement gave to the person in the years that they were finding it difficult to cope.

You don't. The estate is the only liable party. What a strange thing to say.

Sadly it's very common. One of my parents friends almost gave her dads flat away in the end as two years of fees and no one buying it... Sadly there's nothing you can do and the main reason I never buy such a flat. Hope you find a buyer soon

There is provision for recovery of fees owed from the estate if you don't pay them until the house is sold, but they can not take more than the estate. They can force a sale too and that will have significant legal fees that will be taken before you get anything.
But fundamentally anything owed is the liability of the estate, not a beneficiary.

We had this problem with my MIL flat. We put it on the market at £200k, no interest for 6 months, then someone put in an offer of £135k. We just accepted it. We just wanted it sold!

No you don’t. Debt liability ceases with death. If there’s not enough money in the estate it’s written off.

Thanks for correcting @ClareBlue
I was responsible once but then I was the guarantor and that’s completely different

My fil had a lovely little retirement flat. We’ve just sold it but dropped it by about £40k in the end. The service charges will be settled out if his estate, it’s about 18 months worth.

@Seymour5 .......
I think you've made some really valid and interesting points here.
This thread demonstrates so clearly the financial problems that can arise when an owner of this type of apartment dies, or it can't meet their needs anymore.
But to me there is a wider issue - the attitude I have encountered of some people on MN and other platforms regarding the shortage of housing in general.
Fortunately the childish, pathetic and ageist term "boomer" hasn't cropped up here. But there are people who blame this generation for the lack of housing, (and many other things), when in fact most people in this demographic were just doing what they could in a particular period of time.
And these people will often assert that these older people should vacate their homes that are too big for them to make way for families.
The issue that this thread has gone some way to highlight is that things just aren't that simple, and there is no magic supply of suitable housing available for "downsizers" to move into 🤷‍♀️

It is. I think the position of a guarantee of payment is even more dificult. I presume it is mostly family who do this. They then have a doubly difficult situation that they have to ensure payments whilst trying to sort the asset out. That's not great at all and I would say is fairly common. If the fees go over the estate value they could well have to pay the difference. Is this a typical contract?

And the worst situation is you having to guarantee fees but you are not a beneficiary. You would hope nobody is in that situation.

It's in the contract. I pay service charge on a flat whether it's occupied or not. Otherwise someone could say 'I don't use the on site gym/pool/garage/organised activity so take that charge out'.

Been through similar. It’s not Macarthy Stone is it? Family friend struggles. It’s a good set up in premise, better than a car home but they run them like they are in charge of the world and you can’t breather without the managers approval.the power goes to their heads

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!

It's a case of supply and demand. If granddad paid £120k for his new flat 10 years ago the family assumes it will sell for more than that that now and the estate agents don't tell them the truth — that they might only get £70k (and that's if they're lucky).

In late 2020 there were at least nine flats for sale in a nice retirement complex near me. They were all similar and all started out on the market at around £120-130k. A few of the nicest ones sold but four didn't and in the last couple of years more people have died (it happens regularly when people get older) and so there are now around a dozen for sale.

Earlier this year my elderly neighbour lost his wife and he and his son decided that a flat in this development would suit him. They sold the father's house for close to £400k and the son bargained the price of the flat down from around £80k to under £40k because the flat had been for sale for 18 months and the family were paying nearly £8k a year in service charges and council tax. The son established that when his dad dies or needs to go into a full care home, if he can't sell it within six months the company that owns and runs the development will take the flat back for free. As far as the son is concerned, the estate can afford to lose the £39k paid for it. In the meantime his dad is earning £20k pa from the cash he's invested after selling his old home, has no gardening or house maintenance to do and has company and a social life. That's what the £39k has bought.

When it comes to buying a flat in a retirement complex you have to discount any possibility of growth in the property's value. They're not like ordinary properties. Only a small percentage of the adult population can buy them (those over 55 or 60). If you want a property that will appreciate in value (and will sell more easily) then buy a flat in an ordinary block that anyone can purchase from you. You'll still have to pay service charges when your loved one dies, but the property should sell more easily.

I think they should drastically reduce the monthly costs, I get they still need the money as some costs will be the same regardless. But 1 less apartment to clean (if you had a private cleaner you'd no longer be paying) meals, water, electricity. They are not paying for those things so you shouldn't have to either.

If I was your mum I'd reduce the price and get rid of it.

You can apply to the council for the unoccupied rate of council tax, it does in some areas revert to 2x rate if left empty for greater than 2 years.

I would check the contract regarding the service charge if unoccupied.

Hi @LK2610 . Sorry for you loss.

Have you checked the leasehold agreement/service agreements?

Anything that's part of the communal service charge can't be waived. A 24hour warden will be included in that.

Additional purchased services I would expect to be cancelled as the cost won't be incurred by the business.

Catering
Care
Nursing
Domestic/cleaning of flat

Our organisation would not invoice for the above as these aren't fixed costs to the business and the services woukd not be breing delivered.

Administration isn't perfect and the families of deceased residents are sometimes billed for this. However the charges are cancelled when the issue has been raised.

You only have to pay the debt to the value of the estate. So, if the value of the estate (including the flat itself) is £200,000 and outstanding debts are £300,000, you are only required to pay £200,000. The rest should be written off.

There do seem to be two issues - the costs of maintaining the building and grounds - which wuld be the same regardless of whether the flat was occupied, so to me seem fair to continue charging those. Then there are the "personal" services - cleaning, meals, warden cover that seem a bit more of a grey area.

Ahh I see @Sashimiandhisthunderpaws has provided a useful answer on that very issue.

So what to do you do? Do you tell the warden that as five of the 40 flats are empty, the warden will be paid 12.5% less this month and can go home an hour earlier every day, or instead of being on 24/7 call, they don't have to answer emergency calls from have 2am-5am?

The cleaning is for the communal areas of the block, not for individual flats. Do you tell the cleaner and the gardening contractor that because there are empty flats they'll earn 12.5% less?

It's all in the contract you take out when you buy one of these flats. While you or your estate owns the flat, you pay monthly service charges.

I know.
I was mentally sidelined with my anger at having to fork out for a debt but I had been the gaurantor. I have said this already. See past post.

Going to dive into my Ferraro Roche now.

Why is catering not a fixed cost? Surely the chef has to work the same hours to cook 39 meals as opposed to 40, the oven is still on for the same length of time and the food order can’t be so precise that there is a saving by ordering enough for 39 meals not 40?