Can our son live in the house?

[poostinkywink]

Hello, my husband and I have just had a lightbulb moment but are wondering if we’ve missed something. I’ll keep it a brief as possible.

DH’s aunt has just moved from her house to a care home. My DH and his brother have LPAs for their aunt. Aunt’s care is paid by savings. The house is a mess but we are currently clearing it with the view that in 3 years or so, when the savings run out, the house will be sold to continue to pay for her care. My DH and his brother are also the sole heirs.

Our son needs somewhere to stay when in uni later this year. Our Aunt’s house would be perfect. But we are tying ourselves up in knots working out whether legally he could live there temporarily. We would obviously ask our Aunt first but know she would say yes. It would also take the worry of the house standing empty. But could he live there rent free on our Aunt’s request? DHs brother is also happy for this to happen. It seems like such a win win for everyone but these things are never simple and so I thought I’d ask here.

Thank you for reading.

We did exactly this when my mum went into a nursing home.
We did this with my brother’s agreement, didn’t charge rent but felt happier
that the house was occupied to put off burglars or squatters.
We made a contract that stated that our son would either have to vacate the property when the time came to sell, or if he was able to save towards a deposit we would help him to buy it. (This was a house at the cheaper end of the market).

If you hve p o a for your aunt you need to demonstrate that
this arrangement is in HER best interests. You would have to show that your son living there would be better for HER financially than disposing of the property now. Can you do this?

No not for free without risking financial abuse.
the property could be rented out to other students (rentr) and generate an income.
Both brothers have a legal obligation to put DAs financial interests first when dealing with her assets.
Why are you prepared to pay rent to a landlord but not to family?
Also from a tax point of view your DA is gifting your son the market value of the rent.
Your son is also an adult and could claim that the housing was in a legal landlors/tennt relationship.
How will the costs involved in upkeep be funded?
Appropiate house insurance would need to be arranged too.
So it would be much better for everyone if the rental was put on the correct legal basis from the start

A colleague's student age son is doing exactly this with his grandmother's house. He has to pay rent (it's well below market value) otherwise it could be seen as financial abuse. He also does the maintenance, garden, gutters etc and the electricity bill is his to pay.

If DH's aunt still has capacity then the LPOA is irrelevant if its a decision she can make herself and weigh up the pros and cons of it. If she's capacitated and is happy with it then it doesn't matter what anyone else thinks.

If she lacks capacity then the LPOAs would have to make decisions to the benefit of Aunt only and not themselves/anyone they are proxy for. In a situation like this it would be wise to have it approved by the Office of the Public Guardian before doing it. There's a strong argument that having the property occupied is in her interests if it wouldn't otherwise be fit for the open rental market but it being occupied should not come at any additional cost or loss to her.

I have investigated numerous similar situations as potential financial abuse, mostly when relatives have been moved in but the person in care has unknowingly continued to pay direct debits for utilities, or wasn't aware their house had been cleared of their stuff, or hasn't been able to sell the property to fund the care due to a relative essentially squatting in it.

Thanks for all of the replies so far.
It’s so tricky because my DH and his brother are busy with work (and families!) and would not consider renting out to unknown renters. The toll of dealing with her care and financial affairs has been ongoing and arduous and they cannot manage to oversee renting out - would be another stress, even if managed by a company. The house is on a private estate and I won’t go into it here, but it really would not be an easy thing for someone just to move in. Our son knows the score and that is one reason why it would work. It’s either son goes in or no it remains empty.
My DH makes the journey once/twice a week to check on the property but having our son in there means less likely for squatters/damp/ property upkeep so would be ideal from that point of view (DH wouldn’t have to keep doing that journey).
I know she would not be happy to charge rent but we were thinking about the impact that might have on ‘financial gifts’ when she passes away. Those of you who paid a small/no rent, did you seek legal advice before agreeing this?

I’ll come back with more questions! Thanks so much!

If your Aunt agrees then who is to argue.
The house will be looked after and not trashed or used by squatters.
Have a regular formal house inspection - compare to photos etc. and keep a log of repairs and maintenance too.
State the rules clearly to your son.
Who pays rates, water?
How many people can live in the house?
Any parties?

Maybe a discounted rent in return for maintenance/decoration/etc.

Rent being paid may be necessary if there's a POA or if there are questions down the lines about deprivation of assets.

That rent could be low enough to be a bargain for your son and yet could be used directly for the renovations, meaning that aunt needn't fell uncomfortable because she wouldn't be getting the money directly.

When I was a student training for ministry about 20 years ago, I lived in a church property on a caretaking basis. There was a formal agreement setting out terms and responsibilities. I didn't pay any rent, but I was responsible for paying council tax, utilities etc. I notified the church of any problems with the property so repairs could be carried out and in the meantime the house was being lived in and heated. Maybe a similar agreement would work in this situation.

Thanks again everyone for taking the time to reply. We would hope it would be like the experience of Albless- rent free, paying all utilities, CTax etc but looking after the place - upkeep, cleaning, gardening etc and he would obviously move to for it to be sold. He would still have his room with us anyway so not like he would be without anywhere to go. Essentially just lodging there temporarily. The replies here have given us much to think about - both sides of the coin. These things are never straightforward!

You’ve not really said - can the aunt give consent? Does she still have capacity? If so, and all family are in support then it sounds like an excellent idea.

If the aunt (donor) has capacity to decide what to do with her house, she decides and the attorneys just follow her wishes.
If she lacks capacity, the gov.uk website has advice for attorneys on how to make decisions in the best interests of the donor.
The attorneys can work whether allowing your son to live rent -free in the property would be in the donor's best interests by looking at the cost of an additional premiums for unoccupied property insurance, the value of any work your undertakes at the property, etc.
Whether your son needs accommodation is not relevant to the issue as the focus is on the aunt's needs and best interests if the attorneys are making a decision on her behalf.

I’m not sure why the house isn’t being sold now? The proceeds could then be invested ready to be used when her savings run out. Plus there would be no hassle of renting it out. If it were to be rented, then it has to be done properly with rent being paid to her, and the property up to full legal requirements for a tenant.

If the aunt is in a care home, it is in her best interests to maximise her assets so she can afford her care long term. Would it be better for her if the property were sold now rather than later? If not, would it be better to rent it out commercially? How is her capacity?

If your Aunt agrees and has the capacity to do so then it’s up to her. The POA does not come into effect until it needs to i.e. your Aunt cannot make decisions for herself.

Does your aunt have capacity to agree to him living there? If so, and she does as you expect and agrees, there is no problem at all with him being there.

Providing he will look after the place it will be good for the house to have someone living in it. He should pay the appropriate bills unless your aunt is happy to subsidize him (but I think you would be unreasonable to allow her to do that - it's not really in her best interests unless she is loaded, which it doesn't sound like she is).

Remember capacity is decision specific, so she may not have capacity to manager her money but may have capacity to make this decision. Is there someone such as social worker or psychiatrist who could assess her capacity to make this decision. Capacity should be assumed and professionally assessed then you would have no concerns about financial abuse if she can make it.

otherwise look at the costs of professional checks on the property for insurance vs your son living there in return for x number of jobs. I would have it written down showing why it is in her best interests vs selling it now.

It sounds like everyone had been thought of and considered here - you can’t clear it immediately; aunt can pay for care with savings, son needs somewhere to live. The elements I would consider are that a rental contract does need to be drawn up to protect everyone. Needs to include the usual - so it’s clear what would happen eg if the roof falls in or the boiler goes. The other thing to consider (bear with me) is future money laundering checks. We had a property which we let out for around 75% of market rate (long story not relevant!) but when we took out a mortgage against it the bank were really concerned we were using it for something weird that we’d need to launder money for. It was ok once we explained but it really tied things up.

Why can't the property be sold now?

When my great aunt moved into a care home my uncle refurbished her property and I moved in and the rent I paid helped towards the care fees. I think it was slightly under market rate, but she was happy for me to live there. She died a few months down the line, but I stayed there a few years as it was convenient. I had a proper contract drawn up.

@poostinkywink he will be looking after the house and keeping it safe! also the council tax will be lower with his 25% discount rather than en empty property discount which is usually only 10% if anything. it will be kept dry.

In all conscience I wouldn't want to be seen to benefit or that my child would benefit from this arrangement with an aunt. There should be some reasonable rent paid to her account with a deduction for care taking duties.

How many rooms is the house? Would you son be in a position to have trusted other people living there, paying rent, too. Obviously this would mean there would be additional money going back into her ‘care’ pot? Not sure of the legalities of this so you would need to check it

I was your son. I paid all bills except council rates and and strata fees and paid my mum $30 cash per week. Sometimes the cash went into an envelope in my handbag and I would do shopping for her myself.

As Dear Great Aunt was entirely self funded, it was enough to keep her solvent in her daily incidentals (not in UK so csre home financials are different).

Letting it out to non-family members would have a lot of risks (eg would they move out when you need them to?) and much more work and legal liability for the attorneys. So just because it could be let to your son doesn't mean it could also be let to strangers, even if that would potentially be financially better for your aunt.