AIBU to feel limited sympathy over a hard-to-sell inherited retirement bungalow?

[nomas]

AIBU have limited sympathy for these grandchildren about their inheritance? I get it's disappointing but the main takeaway for me is their grandmother had a lovely life in the bungalow and they will still inherit a nice amount.

https://archive.ph/eVPQ2

TL;DR: A woman inherited a £450k retirement bungalow from her grandmother expecting it to help her and her brother onto the property ladder, but strict age restrictions (55+ buyers only), rising service charges, council tax, and slow sales have turned it into a costly burden. Nearly two years later, they've spent over £14,000 keeping the empty property, accepted offers far below its valuation, and are still waiting for a sale to complete, highlighting a wider problem of retirement homes being difficult to sell and draining inheritances.

YANBU: Agree, the grandma had a nice life and the DGC will still inherit
YABU: Disagree, they've lost thousands in potential inheritance

Not necessarily. I would not accept one of the retirement homes with high service charges and restrictions on who can buy them, if someone left me one in their will, or buy one however low the price.

These retirement homes are great while the person is alive they do provide a safe place to live for an older person, but they are a nightmare for inheritors my MILs Mccarthy and stone one took 3 years to sell at a lower price than when she bought it 20 years before, charges still had to be paid and family had to wait for their money which with what was left in the estate after care home costs for two years which ate up most of the estate money wasn't a massive amount each

Someone said upthread that you can rent the property out - you usually can't.

And the service charges are due as they fall, not when you sell the property. So even though the estate pays, if the estate doesn't have any other money, there's a problem until the property sells.

It's time the government got on with reforming leasehold law.

Why can’t it be both?
Both the grandma had a nice life AND those properties are a pain in the arse to sell. The charges in particular are an issue when no one is in the property!!

And btw you’re not just ‘unsympathetic’. You sound jealous and bitter

An inheritance shouldn't be a financial burden. Those places are impossible to shift, virtually worthless. I'd hate to inherit one and wouldn't have the money to pay the annual fees until it sold.

You can usually rent them to people who meet the strict eligibility criteria but there are precious few of those.

Also people looking to move into retirement properties are spoilt for choice with shiny new developments being built all the time with upgraded features. The second hand market is much less desirable as a result.

No-one who inherits one of these properties is getting a free lunch.

Sounds like it’s the provisional value that was incorrect and the fault is with the valuation

Totally agree, its not about the amount it sells for being less than it might have been, its about the cost as it mounts up before sale that you have to pay.

Where does someone find 14k from over 2 years? I couldnt afford that, I'd be taken to court for the debt

These places are a complete rip off.

Once the property is yours and not part of the estate, you are the owner. Despite the fact you probably cant live there because of the age restriction

Very rarely can you rent them out and in any case you would have to comply with landlord regulations and requirements even if the leaseholder agreed.

So the service charges rack up and you are responsible for them. Its a dreadful system.

People think its about beneficiaries being greedy about the sale price, its not, its about the burden they're put under while its waiting for sale

What do people on benefits do? Or people with young kids, high mortgage and child care, scrimping and saving to make ends meet and now a bill comes in for 10k services charges?

I'm in the market (old & achey) for one of these and have had to harden my heart.
There is a beautiful bungalow developement built in the grounds of a small manor that me & my little pals used to sneak into the gardens of when very young and I always said that one day I'd find a way of living there.....
Sadly the financial pitfalls- increasing service charges, drastic depreciation ect have put me off, but my younger self is whispering "go for it"

I agree.

My ex-BIL and his sister inherited their mother's retirement flat. The service charges were £6k a year.

It took ages to get probate and then ages to find a buyer, and they had to find £500 a month to cover the charges for (iirc) over a year. They were so desperate to get shot of it, they let it go for not much more than half the estate agent's valuation.

Something doesn't sound right here. You don't pay Council Tax for a dead person/empty property. Utility bills would be almost nothing with the property empty. And as for the service charges, these should accrue but be debited from the sale at the end - this is the case for a retirement flat that I am currently selling. Our costs to keep the flat whilst it sells, have been ZERO.

You do pay council tax on an empty property, and once you've inherited it, it belongs to you, not the "dead person".

When my mother died we inherited her retirement flat. There were 3 others in the same building for sale at the same time, none of them were selling. Meanwhile we had to find the money for the management fees etc etc. Eventually sold it for less than she paid for it, and we were lucky to find that buyer . Yes, it suited her very well but my goodness what a nightmare to get rid of.

Retirement properties are a scam, and you may feel smug about this story (kind of petty) but there have been some incredibly sad stories about people who inherited them from parents and are being crippled by the charges to the point they tried to hand them back to the retirement complexes for no money and they wouldn't take them. I have heard them described as an albatross around the neck. Laws absolutely need to change on these. Many older people bought them and would be horrified to know how much value they have lost and the burden they have placed on loved ones once they are gone.

I think some posters are missing the pitfalls of retirement property (or the fact it's restricted retirement property actually). We have few around with these restrictions and service charges sitting on market for years and they are priced well below the area prices. Still not budging because they are a headache.
It's fair on them to warn people who (as thread shows) might not be aware.

Actually you really can't rent them out. They usually have an absolute prohibition on sub-letting. A lot of ordinary flats do too, although sometimes it's qualified and you can sub-let with the freeholder's permission.

I agree they are difficult to sell. Buying second hand is a better option but as you say, when there's a shiny new one down the road people don't want to.

I don't know if this can actually be true. The reason these are a massive burden is that if you don't pay the expensive service charges while trying in vain to sell the flat you forfeit the lease. So if you don't pay and you forfeit the lease, it reverts to the freeholder. So either the freeholder takes the flat back, or it doesn't forfeit the lease. You can't forfeit the lease and not have the "ownership" of the flat going anywhere.

Edited: to address your last point: my father and my aunt both bought retirement flats and I remember my aunt saying it would be a millstone around my cousin's neck. They knew they were a pain but it suited them both at the time. Fortunately I was able to sell my father's flat comparatively easily at the time (though at a loss compared with what he'd paid for it 10 years before) and I think my aunt's sold reasonably quickly (within a year) too.

There was another thread recently and people were trying desperately to warn the OP but she said if it suited her relative it didn't matter - s/he might change their mind once that relative has died or needs the funds from the property to pay for a care home.

I'm in this position, except we went on the market Feb 24, our only agreed sale has recently fallen through (their buyer pulled out), so we're back to square one.

The house was valued at £750k but is on for under £500k. I literally don't care what it sells for but as executor and trustee for minors I have to show we have tried to get the best value.

But it's costing us c£6.5k pa in council tax, insurance, weekly handyman visits (required by the insurance), lawn mowing, utilities. And we don't have the age 55 restrictions.

It's a tiresome admin burden as well as the cost.

So, while I understand the "boo hoo, you're getting an inheritance, think yourself lucky", there's absolutely more to it and real people behind it trying to deal with this while grieving.

Surely if you buy one that's already depreciated quite a lot then it's not so bad. Your heirs would still have to deal with service charges if it's trickier to sell but at least the value wouldn't plummet?

I can't think of too many people that would be happy if they thought they were going to get a big wodge of cash, only to find out that that big wodge was actually significantly less than they thought it was going to be.

These boomer fuelled inheritances are the equivalent of a lottery win, and for many people are the only way they can either get themselves on the housing ladder, move up to a property of their aspirations or fund things like expensive home improvements, holidays and cars.

The inheritance cash is literally life changing, so finding out it is going substantially reduced is also going to be life changing - to the negative.

So expecting them to be happy about finding out it is all an illusion is pretty unreasonable.

Personally I would prefer houses/lifestyles to be a lot lower cost and at a price where everyone can afford them off their own backs and don't need to rely on others dying in order to get them. I seem an outlier in that respect though.

Dh and his brother are still maintaining their late DM’s big 4-bed house 16 months after death as probate is taking so long to be granted. It’s a pain in the arse. This is why probate properties sell for much less as the family wants to burden off their hands and the state to be settled.

This.
Do you have £14K spare to service a home you cant sell and cant live in?

Its soo tempting but, having already fallen in value by half I know the investment wouldn't stack up. £350000 (on a new one) spent now would possibly be in ten years or so
A- £130000-150000 with on going charges (£5000 p/a) or
B- a 'normal' bungalow may go up to £40000 or more!
Quite a difference to my family.
A resale is probably going to be worth £50?
Shame, because they are so lovely. Hey ho