Meet the Other Phone. Only the apps you allow.

Meet the Other Phone.
Only the apps you allow.

Buy now

Please or to access all these features

Legal matters

Mumsnet has not checked the qualifications of anyone posting here. If you have any legal concerns we suggest you consult a solicitor.

Building a home for mum on our land

3 replies

maskingtherealme · 31/05/2015 10:19

We are contemplating building a small bungalow at the bottom of our garden. The bungalow build will be financed by my mum but obviously the land belongs to us. The bungalow will have it's own entrance via the highway and will be cordoned off from our garden through fencing and/or hedging. But we may have some 'issues' regarding the ownership of the house and what happens when my mum passes on.

Mum wants to pass the house onto her grandkids (our children). Whereas I am fine with this, my DH is not. I think he is worried about what would happen to the house when the kids take ownership. He envisaged that the bungalow be willed to us, we move in, sell our house and thus the bungalow and any other assets pass to the kids when the time comes. He says there is a line of inheritance my mum needs to follow. As it is, not sure the kids would know what to do with a bungalow on their parents land at a time when they are likely to be at university, in their twenties establishing a life elsewhere for example or with family of their own. I think my DH is worried that mum or the children would try to sell the house and we would end up with strangers, in effect, living on our land.

Am I right in thinking my mum nor the children could sell the bungalow or rent it out without our agreement because we own the land it is built upon?

Not sure how to go about doing this except that technically the bungalow would be 'leasehold' because we own the land.

Finding this all so confusing but would be grateful to hear of other stories with a similar background and how you went about the legalities.

OP posts:
LotusLight · 31/05/2015 11:12

You probably need to see a solicitor. Your mother can leave to her children or her grandchildren - entirely her choice and most accountants and lawyers would advise to grandchildren to save 40% inheritance tax on both deaths by skipping a generation if her estate is at IHT levels.

If you own the land and your mother pays for building then in law she does not get any ownership at all unless you agree otherwise with her. You could if you wanted split the land into two once you have planning permission and make it into two registered land titles - yours and hers.

Also to protect you (not your husband) on a divorce it would be much much better if you did what I suggest above - transfer the land to your mother - am assuming your mother will live in it as her residence so no capital gains tax on any increase in value. Then she builds on what is then her land. Then if your husband runs off with a younger woman that bit of your joint assets is not yours and is your mother's so he cannot get his filthy mitts on it. Or you could transfer it into the grandchildren's names now with your mother and you holding the land on trust for the grandchildren until they are 18.

I am just scratching the surface here though as you need legal advice.

I suppose another option is you grant a long lease eg 50 years or 30 years or longer of the land on which the bungalow is to your mother just like a leasehold flat. Or just keep it all in your ownership and she perhaps has a security over the whole plot - your house and the bungalow of the amount she loaned or provided for the building so that if you and your husband split up she gets her money back and it doesn't go to your husband.

Other issue is if she needs to go into a care home and if she doesn't own the bungalow the council might then pay for her care whereas if she does it may have to be sold and the money used to fund her care.

Mumblechum1 · 31/05/2015 14:07

I agree with everything Lotus Light just said. This is potentially a very complex issue. I did a case a while ago where an elderly lady "gave" her life savings to her daughter and son in law and didn't do anything at all to record that legally. It ended up in court and with them all permanently estranged.

Another option may be a declaration of trust, or a licence to occupy, or to build the property, keep it in your and your husband's names but your mum could "loan" you the build cost and register a charge against the bungalow so that when she dies, her share would be counted in as part of her assets.

As I say, this is potentially a can of worms and you need expert advice, possibly from both a conveyancing solicitor and an accountant.

OliviaBenson · 31/05/2015 14:29

This can all be complicated by what type of planning permission is granted- whether for a separate annexe (tied to the main house only and restricted so it couldn't be sold off separately) or a separate house (in planning terms). So I'd also take advice from planners before seeking legal advice as this could change things somewhat.

New posts on this thread. Refresh page