Gifting property to children? Get it right
Posted: 5th October 2015
It is only natural that many parents should wish to give property to their children or sell it to them on preferential terms but family relationships can change and a tribunal decision has underlined how important it is that proper legal protections are put in place.
An elderly couple had sold their home to their daughter, who in turn granted them a periodic tenancy in respect of the property which allowed them to carry on living there until the last of them died. However, the familial relationship later soured and the daughter successfully sued her parents for failing to pay insurance costs as required by the lease.
Fearing that their daughter would try to sell their home from under them, the couple registered a caution against the property. The effect of that was that they were entitled to be notified of any attempt to sell or otherwise deal in the property. Any prospective purchasers would also be put on the alert.
Although her parents were elderly and infirm and feared losing their home, the daughter applied to remove the caution. In rejecting that application, the First-Tier Tribunal in the case of Dodd v Walker, found that the couple had sold their home to their daughter at an undervalue and thus retained an equitable interest in the property. Registration of the caution was also justified by their status as tenants.
Not the desired outcome, obviously. Too many things can go wrong in these situations if you don't have expert advice. We can help. See our Wills and estate planning and linked pages. Contact us now by email or on 01460 200450