DH wants to sell house significantly below market value

[MrsLyndi]

My DH and I are 59 and 61 respectively. We have one child, she is 29.
My DHs parents passed away 10 or so years ago. About 10 years before this they gifted us their 5 bedroom house in a lovely part of London. They wanted to move back to where they had grown up having inherited his mother’s aunts home, but weren’t ready to see the house go as they raised DH and his late sister there.
DH has been renting the house out ever since, it’s been a nice earner for us as it is mortgage free. We live in rurally a few hours from London and had no intention of moving back so it made the most sense.

About 8/9 years ago we took a risk and allowed some fresh uni grads to move in. They made an impression at the time and we haven’t regretted it. They were lovely tenants. They slowly started moving out and now it’s one of the originals and his fiancé.
They are 27/30, incredibly good tenants (the house is gorgeous, we’ve allowed them to decorate as they wish. They are never late with rent, and just lovely people.
DH goes down to London once a month, he likes to sort the garden out himself and enjoys seeing the couple. He has gotten to know them. They are both from the north, one of them had a rough childhood, was in the care system etc. They are now both very successful, make good money etc.
DH was down at the weekend to do a last clear of the garden before winter. As per he got chatting to the couple, they gave an invite for their wedding next year. They also mentioned that they are starting to look at buying somewhere, joked they wish they could afford the house but it would be way out of budget etc. (We’ve been charging below market rate rent for a while now as we don’t need the income, and they are hassle free tenants who let DH potter in the garden).
They told DH they wouldn’t be looking at more than 1mil or so.
The house is probably worth about 1.5mil now potentially a little more(5 bedrooms, good sized garden, drive way, well decorated, in the catchment area for a fantastic primary, near one of Londons big parks and good transport links!).
DH has been thinking of selling the house for a few years and decided when they eventually moved out that he would sell it. He wants to give our daughter a gift that will pay off her mortgage (less than £500,000). Then use the rest of the money to enjoy our retirement. We have good pensions so that is not a concern.
Now DH has a crazy idea … he wants to sell them the house for what they can afford, around the £950,000-1mil mark, so significantly less than what it is worth!!!

His reasonings are

• The girl reminds him of his mother, he’s always said this. Very cheery, fun person
• One of them has overcome all sorts to get to where they are
• He knows they will look after the house, they are planning to have a family etc.
• “It feels like the right thing to do”

In DHs mind, we don’t need the money, even selling for significantly less, we can take care of our daughter and have a nice retirement.

I’m more on the fence. While they seem like lovely people, what if in 5 years they sell and run off with the £500,000+ profit. How does this work with a mortgage and such? We don’t know them all that well but would be essentially giving them half a million pounds!!!!
DH is a very kind and loving man but often too kind!
AIBU to think this is a crazy idea and wonder how it’s even possible?!

Yes, exactly this.

Can you sell a 2nd house below market value and not be assessed for full value for capital gains. I don't think you can. So it's more than 500k you will be loosing.

It's not about who is more or less in need. He's not said he wants to help the most needy. If he wanted to do that he could send it to Gaza. That's not what he's talking about.

He wants to pay forward his privilege to help a young couple who he knows.

It's irrelevant.

The young couple might be in a similar situation in the future.

The money has come from privilege, no one 'deserves' it.

And if he had no family of his own it would be a different matter.

But he does have a family of his own, which means it's not OK for him to just decide to give a six figure sum this young couple that he is emotionally attached to for some bizarre reason.

It's up to him what he does with his money.

It's not his daughter's money just because she is genetically related to him.

He's already giving her a lot of money to pay off her mortgage.

The Local Authority won't give a crap where the money came from when they're assessing whether the OP's husband deliberately deprived himself of assets and should be treated as still owning an extra half a million quid before he's entitled to any help with his care needs!

No, it's up to you what you do with your money if you are unmarried and have not chosen to either financially link yourself to another person via marriage or bring additional humans into the world.

You have just created this random scenario - any scenario could happen to anyone in the future. It's irrelevant.

It’s a five bedroom house - this is what I found when I searched “5 bedrooms” within 1/4 mile of Maze Hill station. Two results, £1.95m, £1.5m.

https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=STATION%5E6122&maxBedrooms=5&minBedrooms=4&minPrice=900000&radius=0.25&propertyTypes=detached%2Csemi-detached%2Cterraced&mustHave=&dontShow=&furnishTypes=&keywords=

He’s already helped them out hugely with low rent charge. They have good jobs and stability, they can afford a million pound house, they are not needy charitable cases and charitable donations would be better given to a charity which works with fostered children or winstons wish or Gaza.

That's one opinion. Not everyone shares it.

The law shares it.

That's why you can't just walk away with all your money and assets when you get divorced.

The moment you marry you are no longer considered an independent financial entity in the eyes of the law.

Fuck that!! NO.

He's off his head.

He needs to prioritise his own daughter.

Nor was I!

And that yellow toilet! 😦. That way madness lies . . .

I don’t think it would be emotionally healthy. Would he still pop round after the sale? Would he want to “help” with the garden? The couple would feel beholden. It would be weird.
Get the house valued, offer them first refusal at market value but don’t give a big discount. Whoever buys it, your dh needs to say goodbye to the house and sever his emotional ties to it.

Those ones are close to the centre of Greenwich so would be more valuable.

Also OP said:

“While a 5 bed now, was only a 3 bed when DH was gifted the house, we did an attic conversion and dormas as was standard for the area.
So really it’s a 3bed end of terrace that’s been converted. The downstairs doesn’t have loads of living space, 2 of the bedrooms aren’t massive etc. It’s also just off a busy main road and backs onto a council estate which lowers the value.”…

It's an opinion that your children are entitled to inherit money that you own during your life, whilst you are still alive to decide how and whether you want to spend it.

The daughter is not entitled to any of the money, it's not hers until her parents pass away and then whatever is left would go to her.

This is a long thread, so I have not had chance to read every post, but have skim read. I’ve not seen clawback mentioned in what I’ve seen. Apologies if I’ve missed it.
OP seems in part concerned that the couple sell the property and take the profit. That’s quite easily resolved with a clawback provision in the transfer so that on a disposal an agreed proportion of the increase in market value goes to OP’s husband. It needs careful drafting and their mortgagee would need to approve, but it’s not insurmountable.

Mongo yeah but she also said it’s got a driveway, large garden and in catchment for a sought after school.

limefrog agree the daughter has no entitlement to it. But giving large amounts away to people who aren’t family or close friends on a sentimental whim has huge potential to backfire. For example, if you give the “excess” money to your child and then it turns out you need it for carers, chances are she will help you out. These tenants won’t. Or if they turn round and sell for a profit months later, the DH will be very hurt I suspect.

The OP is, however, entitled to a say in what her husband does with their property.

If the OP can think of literally any better use for that money than giving it to this wealthy young couple, for example, to better provide for their own retirement, pass on more of it to their daughter, go on some really fancy holidays or donate it to a charity which helps people in greater need, there are various legal spanners she can put in the works to stop her husband from doing this, because she is his wife.

If the house is in their joint names, she can just refuse.

Even if the house is only in his name, she can see a solicitor and find out what her options are to stop him from selling it.

The nuclear option would be to file for divorce so that the house her husband owns is treated as a marital asset which must go into the pot to be divvied up by a judge.

Once they were divorced, her husband could give all his money away to this young couple if he felt like it, and live under a tarpaulin in their garden eating wild mushrooms.

But not before.

If my dad even suggested doing something as insane as this, my mum would be straight on the phone to me asking for legal advice and I would be putting her in touch with a solicitor.

Probably the first thing we would do is have him assessed for dementia, given that we have a power of attorney set up, and this is not by most people's standards a sane thing to do.

If it was £20k off I’d say go for it, but £500,000k flip no way. If he wants to be that generous give it to your daughter, put it in a trust fund or something.

Absolutely not.
He's letting them
Rent it below market value. If they love the house that much they'll keep renting it.

One of my friends parents did similar - very pricey popular second home area, sold a house well below value to a local couple to get them in the ladder and keep the house in local hands. Local couple sold it full value 6 months later to wealthy second home couple.

Ps if your daughter wants to live in London ams have her own family she would benefit from a home worth over her current 500k one. Or your grandchildren. It's an insane amount of money to give away outside the family and IF you want to gift it surely gift it to charity or real poor people not someone who can afford a million pound house?