Bastard retirement village payments

[Makemineamediumone]

Can't sell it as no-one wants it. Can't rent it as not allowed. Not using it as live elsewhere. Still have to pay the bastarding service charge EVEN THOUGH THE HOUSE WAS INHERITED and watching the equity slip away. Fucking bastarding money grabbing bastards.

[quote Bargebill19]@MurielSpriggs. Sorry but it is true. Certainly of the development mil was in. (One already mentioned)
There are several providers out there. Some are willing to wait for there money, some won’t. It’s not a case of just saying no to them or getting expensive legal advice you have no hope of paying.
They can legally do it and they will if they want them money and of course they will add their costs to the bill you already owe.
You just have to sell ASAP.

They are a good idea and a solution for many older people. Sadly they are also a business with shareholders to pay, and that brings out the dark side of economics.[/quote]
Hi @Bargebill19

See post above. I agree that if the lease has been transferred out of the estate then the liabilities go with it. But the sensible thing is for the executors not to transfer the lease, but to sell it directly from the estate. The management company can huff and puff, but while the lease is owned by the estate, and the estate has no spare cash, they can do nothing except allow the bills to build up to be paid on sale. They don't have any legal relationship with the family. And they don't have any means of forcing the executors to transfer the lease.

@MurielSpriggs you can argue all you want. The reality is it just doesn’t work they way you want it to. Others are also saying exactly the same thing both here and on other forums. I know of one flat within an m and a development that was taken as a charge by the local council. Even the council still had to pay the monthly and annual fees whilst attempting to sell the flat on to recoup their own charges.
If a council can’t stop the charges, with their millions and large legal teams, individuals with little money aren’t going to be able to.

[quote Bargebill19]@MurielSpriggs

You would think as that would be common sense. But in reality it doesn’t work like that.
The developers have to have an income - that’s the monthly and annual charges. That’s why they won’t even buy the flats back off you, even at a reduced price and resell them themselves. Because they wouldn’t have an income stream in the meantime.
It’s purely down to the business model.[/quote]

No it's not. The only income the developers will get is the ground rent, the rest is held in trust for the running of the estate. Service charges are not an income to the management company. It's literally enshrined in law.

@bilbodog

You are right to a certain point. But the law doesn’t go far enough. Need repairs or renovations? Oh yes they will get quotes, but for convoluted reasons too difficult to understand, the contract goes to a ‘firm’ owned by the developers. The staff are paid and hired via another firm linked by the having their same directors as the developers.
So yes ring fences by law, but the reality is it’s still an income stream. All perfectly legal, but questionable.

As a beneficiary, can you not refuse to accept it as it is an 'unattractive gift'
I can't believe you can be held to a legal agreement to which you were not party?

@Hadalifeonce. No idea. Not an option for us as it needed to be sold as mil moves into care. Never heard of anyone doing so.
Really the solution is for the developers to show compassion to bereaved families and give a a grace period where the charges do not apply, just as most councils do for council tax.

[quote Bargebill19]@SwedishEdith.
Conditions of buying might vary from development to development. But the one mil was in said you had to be over 75, physically independent when moving in (eg didn’t need help moving from a wheelchair/hoists/24/7 care) and don’t have to complex mental or physical health issues - so not an alcoholic or to far advanced dementia. You also had to be capable of making your own decisions. If you deteriorated, they couldn’t force you out, but there were a lot of ‘conversations with wider families’ which usually resulted in that resident being relocated to the care home down the road within a week or two.
At that time they were cheaper than a care home even with buying the extra care packages that were offered, so a lot of people lied and the families were using the block as a glorified care home. Resulting in a lot of annoyed other residents. Currently over half the 48 flats are empty on resale. Originally they were marketed at £250k but are now going for less than £90k after about 8 - 10 years.[/quote]
Wow. What a complete disaster!

@Lalliella

I will eventually inherit one of those from my DM. She bought new so she paid a premium for that. She pays a high service charge, but she gets a lot for her money: security, staff on hand, events, activities etc. I encouraged her to buy it and it’s perfect for her, she’s really happy there and wouldn’t have coped during lockdown in the place she was previously.

I don’t care if its value reduces to zero and I inherit nothing. Her happiness is more important.

That's commendable. But you realise it's not just that it will be worthless? Will you feel the same when you're paying maybe £1000 a month in fees for something you can't sell for next to nothing?

It's not about when you've finally sold what you manage to get back. It's about the part in between where you're paying interest on inheritance tax (possibly) and service fees while desperately trying to sell.

That's a whole different shit storm.

@Hadalifeonce

As a beneficiary, can you not refuse to accept it as it is an 'unattractive gift' I can't believe you can be held to a legal agreement to which you were not party?

Yes you can but then you get no inheritance. Personally, I would refuse it as it's not worth the hassle. But if the OP has already accepted the flat then it's too late.

@RickiTarr

Yes it looks that way doesn’t it. But not according to the developers. Less residents = less staff/overheads/wear and tear. Yet still
getting the payments for the costs as if fully staffed etc.
Meanwhile they are throwing up new builds all around.

The actual issue is the lack of an alternative model though. What do people do when a house and stairs is too much for them, they want somewhere secure and quiet with an oncall system?

@theemmadilemma

Said it better than me. !

@MurielSpriggs

No, you have to pay out of your own pocket - it’s no longer in the deceased’s estate, it’s now yours. Even if the flat you inherit is worth nothing, you still have to pay all the charges with it, because it’s your property. It’s not a matter of having no inheritance, it’s that you have to pay the charges out of your own salary or savings for ever - unless you can sell it.

This is not a sensible way to administer the estate. The executors should not distribute the assets in the estate until the flat is sold. In other words the flat remains as part of the estate, and the charges are debts of the estate, not of the family. If there is no cash in the estate to pay then the management company will just have to wait until the flat is sold. They have no power to force the executors to transfer the lease to the family, and the executors can take as long as they need to wind things up.

I agree that the sensible thing is to try and keep the flat within the ownership of the estate of the deceased.

However does anyone know if that is legally possible? Once probate has been granted is there legal requirement on the executors to distribute the estate as quickly as possible? Could the estate remain undistributed for years and years and years if everything else has been sorted?

@SpiderinaWingMirror

The actual issue is the lack of an alternative model though. What do people do when a house and stairs is too much for them, they want somewhere secure and quiet with an oncall system?

This is precisely why they are ideal. It’s what happens afterwards - when the person dies or moves into care. There is no help/compassion from certain developers. Note: not all developments are handled the same way as pp stated some are charitable etc etc. The idea is great and does exactly what is needed to fill that gap, the business model not so great for reasons pp have posted.

The charges have to come from the estate. They cant be inherited by the OP
Could the beneficiaries of the will do a deed of variation to leave the flat to the actual company (freeholder)?
You lose the £70k but walkaway with no ongoing charges or stress of trying to sell it.
It will also concentrate the mind of the company to get it sold to some other poor unsuspecting person.

Hello @Bargebill19

I'm sorry to hear about this.

Just out of legal curiosity what was the managing company threatening you with to force you to pay? I would reiterate that until the executors transfer the lease to the beneficiaries then the beneficiaries have no legal relationship with the management company and they have no more leverage over you than they would over me!

I know of one flat within an m and a development that was taken as a charge by the local council. Even the council still had to pay the monthly and annual fees whilst attempting to sell the flat on to recoup their own charges.

Can I politely say that I don't think you've understood what I'm saying. When the council enforced their charge over the flat (I'm guessing to recover care fees) they became effectively step into the shoes of the owner, and now have a legal relationship with the management company. They are quite rightly responsible for the fees. Just to repeat once more - if a lease like this is left in a will, the executors should retain it in the estate until sold. The estate is responsible for the fees. Not the beneficiaries. If there are no liquid assets in the estate then the management agents simply have to wait until the flat is sold, and there are!

I enquired with retirement home rental companies about selling to them last year but they werent interested in buying MIL place (it was churchill - which if you look are owned by someone who was part of the M&S family) as they were having trouble renting out the ones they already had on their books.

It just doesn’t work like that. Sorry it just doesn’t. We aren’t the only ones, so it’s not just me ‘misunderstanding’.
They will take you to court to recover unpaid fees and costs.

All it takes is some compassion and help, or a buy back scheme from these companies. It might encourage more people to look at buying them if there weren’t so many bad stories around.

One of these opened up locally a few years ago, however they were unable to sell enough units, so they changed it from a retirement village to luxury apartments! Now anyone of any age can buy a unit. No idea what happened to the original owners who now have to share their facilities with the new owners.

@bilbodog

That’s a real sign that things are not good. Sorry it’s got that bad. Have you managed to sell yet? Fingers crossed for you.

What happens if you simply can't afford to pay the fees?

@ZombeaArthur. That’s a solution. But shows that the market is saturated for the retirement village model in that area.
Our development had a restriction placed as part of the planning - no one under 75.

Hi @titchy

I agree that the sensible thing is to try and keep the flat within the ownership of the estate of the deceased.

However does anyone know if that is legally possible? Once probate has been granted is there legal requirement on the executors to distribute the estate as quickly as possible? Could the estate remain undistributed for years and years and years if everything else has been sorted?

The main duty owed by the executors is to the beneficiaries. If the beneficiaries are happy to wait, and the flat is hard to sell, then that won't be a problem. There would normally be provision in the lease for the lessor to forfeit the lease eventually and to sell it as debts mount up, and that is certainly not a point you would wish to reach. The critical point though is that all these liabilities are contained within the estate. The family is not responsible to pay anything from their own money.

@Bargebill19

It just doesn’t work like that. Sorry it just doesn’t. We aren’t the only ones, so it’s not just me ‘misunderstanding’. They will take you to court to recover unpaid fees and costs.

All it takes is some compassion and help, or a buy back scheme from these companies. It might encourage more people to look at buying them if there weren’t so many bad stories around.

It does work like that. There's a specific legal framework in place that makes it work like that. If the lease stays in the ownership of the estate of the deceased and the estate has no cash, then there's nothing for anyone to recover. The service charge just has to wait for the money.

If the lease is transferred into the name of a beneficiary then the beneficiary becomes liable for the service charges which pay to run the site. And unfortunately, occupation doesn't really impact the running costs of a development. 24hr staffing costs in excess of £100,000 a year whether or not half the flats are empty. Cleaning the communal area has to be done even if fewer people use them. Insurance has to be paid, based on a rebuild sum which doesn't go down if there are vacant flats. So it makes no difference whether there are fewer people occupying it, the costs still need covering.

@Bargebill19

They will take you to court to recover unpaid fees and costs

If you are not the lessor they simply cannot! Any more than they can take me to court. If they are threatening you with this and your name is not on the lease they are bullying you .