Selling parents house to pay for care with elderly mum and daughter
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Selling parents house to pay for care

15/11/2023
(Last Updated: 07/02/2024)
620
10 min read
Key Takeaways
  • The selling process has complications such as Lasting Power of Attorney, unknown answers to legal enquiries and challenges getting documents signed.
  • The sale proceeds are shared per the beneficial interest split, which may not always be equal.
  • If you are under pressure for a fast sale to meet care home needs, you may be in a weaker negotiating position against the buyer.
  • You may be able to enter a Deferred Payment Agreement (DPA) with the care home, until the property sells.
  • The home could be disregarded from the financial assessment if someone else lives there too.
  • The homeowner can be forced to sell the house if they have more than £23,250 of assets, no one else lives at the property, and they must live in a care home.
  • Be careful not to deprive the care home of assets. Read more - Gifts to avoid care home fees.
  • There is a potential cap to care home fees proposed for 2025, where an individual will not need to spend more than £86,000 on personal care over their lifetime.

The cost of living in a care home is considerable; often, selling your parents' home is the only option to cover the cost. But there are complications to consider:

We will cover all this and more and guide you through each stage of the conveyancing process when selling your parents' house to pay for their care home fees.


Do I have to sell my parents' home to pay for care home fees?

Whether or not you have to sell your parents' home depends a lot on who currently lives there, if their assets are worth more than £23,250 and whether they need care at home or a care home.

What if someone still lives there?

The property can be mandatorily disregarded from the financial assessment if your parent goes into a care home and the property is occupied by:
  • their partner, former partner or civil partner, except where they are estranged
  • a lone parent who is their estranged or divorced partner
  • a relative of theirs or member of their family who is: aged 60 or over, their child aged under 18, or incapacitated.

You wont have to sell your parents' house to pay for care home fees if they only go into a care home for under 12 weeks, or if they have personal savings enough to cover their care home costs.

Who is classed as a relative?

A relative is a: (a) parent (including an adoptive parent); (b) parent-inlaw; (c) son (including an adoptive son); (d) son-in-law; (e) daughter (including an adoptive daughter); (f) daughter-in-law; (g) step-parent; (h) step-son; (i) step-daughter; (j) brother; (k) sister; (l) grandparent; (m) grandchild; (n) uncle; (o) aunt; (p) nephew; (q) niece; (r) or the spouse, civil partner or unmarried partner of (a) to (k) inclusive.


How do you value the home?

The council value the property in their financial assessment. The present market value is less any mortgage or loan (including equity loan) secured on the property and less 10%. The 10% is set aside for the costs of selling the property. A professional valuer, such as a RICS-qualified surveyor, should undertake the valuation. We have a panel of RICS surveyors to help value your property, and costs start from £360 INC VAT.

How do you value the home if jointly owned?

When you own a property, you have the legal owners, the names listed at the Land Registry, and the beneficial owners, the people who should benefit from the proceeds of the property (known as the proceeds of sale). In most cases, they are the same people, but not always. Here are some scenarios which look at the various ways you can hold the beneficial interest jointly and how to calculate each person's share.

Wherever there is a question over the enforcement of a sale of a jointly owned property, the 2 general principles apply:

  • What was the intention for the property when it was bought? Family home, investment, or some other reason.
  • What was the purpose of the property? A home for all owners, or a home for some and an investment for others.

The purpose and intention may change over time and may change whether the property can be used in a financial assessment. Add to this the question, how is the beneficial interest held - joint tenants or tenants in common?

Joint Tenants

If your parents own the property as joint tenants, the owners equally own 100% of the beneficial interest. Most married couples own their property as joint tenants because if either party dies, the surviving owner still owns 100% of the property. Here are some examples of how the council could view joint tenants:

Scenario
Do you have to sell your parents home?
Scenario
Parents are joint tenants, and both need to go into a care home
Do you have to sell your parents home?
The property is considered in the financial assessment and will need to be sold if your parents have no other means to pay for their care home costs. Half of the beneficial interest is used for one parent and half for the other.
Scenario
Parents are joint tenants, and one needs to go into a care home
Do you have to sell your parents home?

The property cannot be sold if one of the married partners still lives there. The local authority will use half of the beneficial interest within their financial assessment and most likely agree to a Deferred Payment Agreement (DPA) to pay for the care home needs. A charge is registered on the property, ensuring the debt is settled when it sells.

The property will likely be sold when the remaining owner leaves and enters a care home. The DPA is settled from the sales proceeds, and then the balance of the sales proceeds is used to pay for home care fees for both parents.

Scenario
Parents are joint tenants, but one has died
Do you have to sell your parents home?
When the surviving joint tenant needs to go into a care home, the full beneficial interest belongs to them. Read more - Deceased Joint Proprietor (DJP)
Scenario
Parents are joint tenants with family member
Do you have to sell your parents home?

When a property is held as joint tenants with a family member if you all live in the property as your main home, then it is unlikely you'll have to sell the property to pay for care home fees. This was confirmed in Chief Adjudication Officer v Palfrey in 1995. In this case, Mr Palfrey bought a property as joint tenants with his daughter for them both to live in. A question arose as to whether the home should be sold to pay for Mr Palfrey's care home fees.

The Judge ruled that even though Mr Palfrey was no longer living in the property, where the property is jointly owned to live as their principal residence, the sale of the property shouldn't be enforced. The position would change if the daughter vacated the property.

Tenants in Common

Where the property is held as tenants in common, the beneficial interest is shared in separate shares and doesn't automatically go to the surviving owner; instead, the share goes to your estate IE, whom you left in your will. Here are some examples of how the council could view joint tenants:

Scenario
Do you have to sell your parents home?
Scenario
Parents are joint tenants, and both need to go into a care home
Do you have to sell your parents home?
The property is considered in the financial assessment and will need to be sold if your parents have no other means to pay for their care home costs. If not equal, the separate shares should be backed by a deed of trust with a form 17 to confirm the unequal share. Read more - How do I prove an unequal share with my spouse?
Scenario
Parents are tenants in common, and one needs to go into a care home
Do you have to sell your parents home?
The property cannot be sold if one of the married partners still lives there. The local authority will use the share of the beneficial interest of the parent going into the care home within their financial assessment and most likely agree to a Deferred Payment Agreement (DPA) to pay for the care home needs. A charge is registered on the property, ensuring the debt is settled when it sells.
Scenario
Parents are tenants in common with family members not living in the property
Do you have to sell your parents home?

When a property is held as tenants in common with a family member, you'll likely have to sell it to pay for care home fees if they don't live in the property as their primary home. This was confirmed in Wilkinson v CAO in 2000. In this case, when a parent died, they left their share of the property to their daughter, and the daughter gifted this to her brother.

The Judge ruled that a sale of the whole property could be enforced at market value for the beneficial interest.


What is different with the conveyancing process?

If your parent(s) no longer have capacity and you are handling the sale on their behalf the conveyancing process differs slightly:

  • Lasting Power of Attorney. A power of attorney is often in place to allow family members, including adult children, to act on behalf of their parents, which means they can sign the property forms, contract of sale and transfer document (TR1). You'll need to provide a certified copy of the Power of Attorney to your conveyancing solicitor, who provides this to the buyer's solicitor. If you don't already have a power of attorney and need to get one for the sale, it can take 20 weeks for the POA to be processed. You cannot exchange contracts until the POA is processed. You can apply at GOV.UK
  • Property Information Forms. If you are having to complete the property information forms on behalf of your parents, you may not know the answers to the questions. i.e. When was the boiler last serviced? Do you get building regulation sign-off for the conservatory? Are there disputes with neighbours? Unless you have been living in the property, then most of the answers in the property information forms will be "Not Known", unless your parents have kept their paperwork in order.
  • Replies to Enquiries. When the buyer faces many "Not Known" answers, they often raise more enquiries than normal. Legal enquiries need to be satisfied to allow a buyer to proceed with the purchase. Some buyers will pull out if there are too many unknowns.

How to answer legal enquiries


Can I be forced to sell my parents' house to pay for care?

If the equity in your parents' home is above £23,250, the property will be included in the local authority's financial assessment. If your parents' home needs to be used to fund living in a care home and there are no other assets to fund it, then an enforcement to sell could be applied.

Can the government take your house to pay for care?

As mentioned above, the Government can take your house to pay for your care if the right conditions are met. If you have no other means to pay the care home fees, then the local authority will assess the financial position of your parent(s) and the rights of any other occupants in the property before any decision can be made around enforcing a sale of the property to pay for care.


Top tips when selling parents house to pay for care

  • Clean and tidy the property. Dirty or dated properties can often put buyers off, so to avoid this get the property deep cleaned. If you don't redecorate, then wash down the walls and surfaces. A day of cleaning, tidying and doing the garden will make the property worth more to buyers. A property in poor condition will often receive lower offers from buyers.
  • Service the boiler. A buyer will always want to know the boiler is serviced, so getting this done will address this enquiry before it gets raised. The cost for a boiler service ranges from £100 to £300.
  • Find the paperwork for the property. Ask your parents where the property's deeds and certificates are, as any buyer will want these. You can download duplicate certificates here for FENSA (double-glazed doors and windows) and Gas Safety for boiler installations.
  • Get your Power of Attorney. A power of attorney can take 20 weeks to be finalised, which could put potential buyers off. Having your power of attorney in place as soon as possible stops this from being an issue.
  • Watch out for low offers. You may feel under pressure to sell quickly for under the current market value, especially if you have large care home bills to pay. There is a fine balance between selling quickly to get money in versus holding firm to get a higher offer.
  • Don't forget about kerb appeal . Making a good first impression only takes 8-12 seconds!



Frequently Asked Questions
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Andrew Boast of Sam Conveyancing
Written by:
Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.
Caragh Bailey, Digital Marketing Manager
Reviewed by:

Caragh is an excellent writer in her own right as well as an accomplished copy editor for both fiction and non-fiction books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey and mortgage related articles.


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