Lending money to pay for house repairs

[FifeSquirrelsKnockingBackTheRedBull]

An elderly relative needs some essential repair work doing on their house but they have limited savings.
I’m happy to pay for the work but would really like the money back at some point, talking about potentially thousands of pounds. Relative owns 50% of the property and the rest is in trust for their adult children (deceased spouse, they were tenants-in-common, relative has lifetime interest)

Is it possible to loan the money on the basis that when the property is eventually sold I will be repaid from the proceeds and is this fairly straightforward?
Relative would like to stay there until death but obviously there’s a chance they might need care at some point and I understand the local authority have the right to undertake financial assessments etc

Thank you for any advice

Is the relative happy to proceed on this basis?

The key thing will be to have the agreement properly set out in writing so that the terms of the loan are very clear and have it signed by both parties. Also would be good idea to involve the children who expect to inherit so they are aware of the debt to the Estate.

If you decide to do this then make sure it is drawn up properly and a charge is placed on the property for the debt.

I agree about keeping the children (assume adult children) who own the other half in the loop. Perhaps it is improvements that they should have a say in or may contribute to if it is going to increase (or potentially decrease) the value of the property

Are the set to inherit dc not willing to help as they own half so I'd assume technically also responsible?

Hey! Lawyer here - absolutely not. The adult children with a legal financial interest in the home should be paying to upkeep their asset (effectively) and help out their own parent. This should not be on you. Imagine they suddenly hit another hard ship - are you going to demand a frail elderly person pay you back from what, pension? Are you going to be able to keep demanding payment over winter if they’re struggling with fuel costs??

You have no legal interest in the home and while yes, you could sign a contract to say you’ll be paid back from her 50% if not paid before death, this will also cost you money to draw up and cost money to then enforce.

As you also say, they may need care and the council could ask for sale of the home to pay for fees. I’m almost certain your debt would NOT be a priority creditor over the councils care home fees (thinking of the 50% value she has ownership of) unless you put a charge on the title of her home stating your debt must be paid from proceeds of sale. I guarantee the adult children won’t want you to do and neither will the elderly relative! Nope nope nope.

Stop the conversation now and reach out to her adult children who should be paying for this. Or give the money to them knowing you will be doing a nice deed but at very high risk of not getting it back and you accept that and don’t NEED it back.

Another suggestion is to spread the risk across you and her children and say “we can all contribute £750 to the repairs” but they may be reluctant to not be paid back until their parent passes away. My in laws have had to pay for boilers (£5K) and correcting land deeds etc and my MIL and her brother and their mum pay 1/3 each. It really should be on this persons children….

Agree, the children have some responsibility here to maintain the property although they may not be all that willing since they don’t live there. It is however an investment in their asset. This is a scenario I fear as pil have set up similar for the future.