Solicitor wants me to buy my late mums house of ourselves.

[Sillymoo168]

My late mum left me 80% of her estate and 20% spilt between her 4 grandchildren, she had equity release on the house( we didn’t know until she died) but we have paid it off ourselves(we are not well off) and now we have been told to get a conveyancer to act for us buying the house, we have asked the solicitor why we need to buy it off ourselves and she hasn’t given us an answer.

I doubt anyone can help unless you give more information. What did your mum's estate consist of? What was the house worth and how much was due to the equity release lender? Who exactly paid them back? Are you planning to own the house with the grandchildren or will they get their share of the inheritance some other way?

Was the solicitor perhaps talking about transferring the ownership of the house from your mum to yourself at the Land Registry?

You wouldn't need a conveyancer to do this, you can do it yourself. Here is advice on how to do it from the gov.uk website

https://www.gov.uk/update-property-records-someone-dies

Who is ‘we’? How do the grandchildren get their share of the estate?

Have the grandchildren been paid their 20%?

Who owns the house? If it's still in the estate and needs to be split 80% to you and 20% between the grandchildren, then you'll need to buy it off the estate to release the 20% to go to the grandchildren if you want the house for yourself.

You need to ask for explanation from your solicitor.

Are you sole executor?
What does your mother’s estate consist of?
Property, stocks and shares, savings in accounts?
Would it not be easier to sell everything put it in the pot and divide it out as per your mother’s instructions?

Well the equity company will own a percentage of the value do I assume it’s them who you need to buy a share from?

If it was equity release, surely the equity release company own the house. If you have paid the company back the loan, it surely won’t mean the house is yours until it’s transferred back into your name. But you can’t own the whole house, because 20% needs to go to grandchildren.

I think you need to get her to clarify in writing - if there was a loan against the house this should be deducted from the value to be shared out. What was left would be split 80/40 then you would have the bit that would have been owned by the equity company that you now own. It sounds quite complicated so get them to earn their money and work it out. I am assuming you have evidence you paid off the equity company

Equity Release is essentially the same as an interest-only mortgage, except that you don't necessarily have to make any repayments against the interest.

The amount outstanding on the loan will depend how long it went on for and for how long, if at all, her mum was making any repayments.

The OP said that they have paid off this loan themselves:

"she had equity release on the house( we didn’t know until she died) but we have paid it off ourselves"

With equity release, the lender does not "own" the home.

"...then you would have the bit that would have been owned by the equity company"

It's no different to taking out a mortgage or secured loan

Op, I am bit puzzled why you paid off the equity release? Did someone advise you to or did you do it off your own back?

Do you have this in writing from the solicitor? Perhaps you can copy what she has said? I'm unclear why you decided to pay off the equity release, unless it was a very small amount I fear you are going to be worse off owning the house? Where are the grandchildren getting their 20% of her estate from? Does she have separate assets sufficient to pay these amounts?

Make sure you use a good legal advisor as you don't want the children losing their first time buyer status for the sake of a small amount in the house if at all possible.

20pc of the value of the estate is owned by the grandchildren, even if they are minors.
Usually, in a situation like this, the house is sold and the proceeds divided according to the deceased's wishes (80pc to you 20pc to the grandchildren).
If you don't want to sell the house and instead keep it then you will need to buy out the grandchildren. This ensures that they can get 20pc of the home's value on the basis of 'a reluctant seller and a reluctant buyer' (which gives a fair price).

They won't be owing 5% each of a house, either they will need to be paid the cash value from the estate or the house will need to be sold in order to pay them. There may be other assets to sell to give them that 20% but having equity release on the house suggest not. Which make it even more baffling that the OP decided it was a good idea to pay back the equity release on a house which is possibly going to have to be sold anyway? Perhaps she will come back and clarify?

Are you certain it would be impossible for the grandchildren to retain their 20% ownership of the house (in trust if they're under 18) rather than a sale being forced? They may be happy to agree if the OP wants to avoid a sale and would benefit from future appreciation of value.

OP, as PPs have said, it's a little confusing and depends on the detail. Will there be enough cash in the estate without selling the house to pay the equivalent of the grand children's 20% of the total taking into account the house value prior to you clearing the equity release? If so, it may be a case as a PP has said, more a matter of changing the title. If not then you may need to seek their agreement to retain their interest in the property, adjusted for the equity release you funded or pay them the funds they're due directly otherwise how do you propose to manage the distribution without selling the house?

Good luck.

Are you certain it would be impossible for the grandchildren to retain their 20% ownership of the house (in trust if they're under 18) rather than a sale being forced? They may be happy to agree if the OP wants to avoid a sale and would benefit from future appreciation of value.

If they retain an interest in the house, what happens when the OP needs to replace the roof or install a new kitchen? Is she going to ask them for 5% each? Or maintain some kind of records where when there is an eventual sale all that expenditure is taken into account? What happens say in 3 years when the oldest grandchild decides they need the value of their stake in order to buy their own house? And two years later another one wants their share to fund their wedding?

"...what happens when the OP needs to replace the roof or install a new kitchen? Is she going to ask them for 5% each?"

It doesn't work like that at all, and I'm sure that you're probably aware of that.
.

"What happens say in 3 years when the oldest grandchild decides they need the value of their stake in order to buy their own house? And two years later another one wants their share to fund their wedding?"

In contrast though, these are very relevant questions to ask.

There is only the house there was a lot of debt to be paid, the grandchildren are being paid (luckily I have been left some money in another will) and the reason why we paid the equity realises is I want to keep the house to live in myself and was very close to losing it. The Grandchildren are all being paid what they are untitled to.

From what you have said there is no reason at all that you need to "buy" it from yourself.

It may well just be that you have to transfer the house into your own name at the Land Registry

So I’m assuming you have had 3 valuations for the property and will be paying the children their market share?

There must be considerable savings if the grandchildren could be paid in cash their 20% of the value of the full estate, including the house value.

Yes we did get 3 valuations.

No there isn’t considerable savings just lots of debt that needs to be paid before the grandchildren get paid and the house will need work doing so that was taken into consideration. If people think I’m trying to do the grandchildren out of any money then they are wrong.

I'm assuming that the house is of considerable sentimental value to you hence your strong desire to live in it. It sounds like the actual value of the estate after debts have been paid is very little and in order to pay the four grandchildren the amount they are due and, to avoid selling the house in order to do so, you are actually paying them yourself from another inheritance. You have also paid off the equity release company. So at the end of the day the actual value of your inheritance is very little? It must be a really special house to you!

Still doesn't really answer the question that you originally posed about the solicitor saying you needed a conveyancer. Do you have any more detail on what was actually asked of you?