To not want this inheritance if it lands me in debt?

[Kenclucky]

Bit confused about this -

DM bought a leasehold flat in one of those semi-managed blocks with a warden, communal gardens etc. She's getting on a lot now and told me today that the flat is left to me in her will - but that that means the communal fees and mortgage would need to be paid until the property sells.

I don't think there's any mortgage on it, or if there is its only small. But the communal / service fees are really high - about 1k per month.

Now me and DM sadly don't get on well at all which is a bit by the by, but basically I wasn't expecting to be left anything and really don't want anything from her. Those types of flats in those blocks seem to take forever to sell - her one was on the market over a year before she bought it and there are at least 3 others for sale in there. So I'm pretty worried I could end up saddled with this thing and having to pay 1k+ a month which I really can't afford for an unknown length of time.

She says she's put me as Executor on her will, which makes me liable for all payments. And also if I become the owner of the property I'm liable anyway.

I could refuse the inheritance- but looking at Google it sounds like that would make it pass to the next in line, which is my children and would be in their late teens / early twenties so obviously I would never saddle them with it either. There is nobody else, she has no other family.

Are we basically stuck with her ongoing payments eventually, one way or another? And AIBU that is a rubbish system if so to be forced to pick up the pieces for something you don't even want...

Rent it to over 60s or whatever and simultaneously have it up for sale.You write in the tenancy agreement for the occupiers to be willing to show the flat to prospective buyers.
The rent should cover the service charges..
The sale takes a long time so hopefully coincides with the end of the tenancy term

If you want to sell it quickly then you just price it very competitively, ie cheaply and someone will buy a bargain. And you'll get your inheritance very quickly. Much better than refusing to have it in the first place.

It's definitely something which needs to be checked because it can make a massive difference when selling. Forewarned is forearmed.

I don't think this is correct. I remember a thread a few years ago where people were posting about their terrible experiences of trying to sell these kind of flats after a parent had died.

It was eye opening and made me vow never to buy one for myself. I'll try and find it.

Could you possibly rent the property out on a short term lease, or even Air BnB whilst the property is waiting to be sold in order to cover the running costs?

You cannot do a rental or Airbnb. Unless the renter is over 60 or even 70 for some complexes. I honestly don’t work for any of them but Mum was happy there. Only rent or if you want to buy buy second hand and not when you are very elderly. One man brought one for himself and he was 91!!

I just had a look at the McCarthy and Stone terms and there’s more
bad news as not only does the service charge continue post death, there’s a charge when you sell it and a charge when you rent it out (rental is obvs. as per the terms of ownership so no AirBnB or young relative living there).

Just look and the terms and conditions with the main ones being:

You have to pay the service charge until the flat is sold. The price is very likely to have gone down significantly. Just accept that and don’t put your head in the sand about the pricing of these sorts of places.

You cannot put someone in the flat i.e a young person until the house is sold.

These are retirement complexes

Dont buy at late 80’s or even 90

Only consider second hand. You could get a bit of a bargain. Dont get carried away with brand new. We all know there is a premimum on new builds generally. Fine if you are planning to stay for years and years but unlikely with those sorts of retirement places

Or rent. Not cheap but realistically you will only need one for a few years especially if you don’t buy until mid 80’s.

Or just stay in your old house even though it’s too much for you and not adapted for an old person with stairs to fall down and baths to slip in. With relatives around the corner and carers in every day it could work. Mum hid for years what was happening and then had a fall. Even then we tried carers but she called me very regularly very anxious about things (I lived 100 miles away)

I agree with the PP who says buyer beware but what I observed at Mum’s development is that people were moving in far too late and buying new. They weren’t care homes and don’t pick you off the floor if you fall. They don’t take people with dementia but there is only a short assessment so you might find a few people get through and then it becomes obvious they aren’t able to live independently.

Sorry to hear this. Is it a Mcarthy and Stone one? And were you not able to refuse it?

Jeez these retirement homes really are a ruthless money grab aren't they.

They really are. They’re really only suitable for wealthy childless people who don’t care about the value of their estate after they’re dead.

Many elderly people are very wealthy that's bound to attract a feeding frenzy of sharks eager to feast on all that money.

This is a Class F Exemption which the OP would need to apply for after her mother dies and the property is left empty. The exemption ceases when one of the following happens (whichever is the earliest): six months after probate, if the property becomes occupied, if the property is sold, or if the property is passed to a beneficiary.

Not quite right. Indeed anyone can refuse or "disclaim" a bequest and the gift goes back into the estate to be redistributed to other beneficiaries (or to the Treasury if there are no other beneficiaries), but the rules of intestacy only apply where the deceased hasn't made a Will (i.e. dies intestate) which isn't the case here as the OP states her mother has made a Will leaving everything to her and her children.

Exactly this. It's called a Class F Exemption and all local authorities can grant one on a deceased's property for up to six months after grant of probate (but it would expire earlier if the property becomes occupied, is sold, or is transferred to the beneficiary).

I just checked with my property lawyer friend. She said that if you inherit one of these flats, the management company will try to get the service charge out of you while it is empty, but they can't legally force you to pay it. If you don't pay up, the charges will add up until you sell the property, at which point you do have to pay. If you don't have any luck selling it, the freeholders will eventually repossess the flat and they are obliged to sell it for the best possible price. They will take the money owed out of the net proceeds and give you the remainder, if any. So there's no need to worry that you have to pay service charges while the property is empty.

So the best strategy is pretend you're trying to sell it, pretend you believe that you have to pay the service charge etc but in reality do nothing and pay them nothing. Because ultimately they have to step up and deal with it and then give you the proceeds (minus any accumulated costs) ?

Could you rent it out on short tenancies to cover any service charge while you are waiting to sell? Residents typically have to be aged 55 or over. You might find there are renters out there.

Better to succeed in selling it asap, because the freeholder won't act quickly and the service fees will be adding up all the time it is unsold. But yes, if you do nothing, the freeholder will take it back and deal with it. You don't need to pretend anything, just tell the management company that you are not obliged to pay the service charges before the sale, you can't afford to, and that they will be paid after the sale.

@Silvers11

The only possible exclusion to that would be if Inheritance Tax is due. But Your Mum's total estate value ( including the Flat) would need to be more than £500,000 if she has willed it to you, her daughter. Seems unlikely? That would need to be paid within 6 months though, so if there is an Inheritance Tax liability, you might need to pay that yourself and recoup it from your Mum's Estate once it's all settled.

Any idea what happens if the valuation of the flat pushes the value of the estate above £500,000 but it's impossible to sell at the price it's valued at?

Yes - you would have to claim a refund of the Inheritance Tax paid from HMRC - but I think there is a time limit of 3 or 4 years to do so