Lay deputy blog series: I am a deputy - where do I start? Buying and selling property

Buying and selling property is one of the biggest tasks a deputy may be faced with whilst managing the Protected Party’s (‘P’) affairs. The selling of a property may be the only way to access funds that are so desperately needed to pay for P’s ongoing expenses. P may be downsizing and both the sale and purchase of a property may be required. P may need to purchase a more suitable property for their needs as their condition evolves. The property may not only be for P but for partners, children, other family members, carer’s and those involved in P’s daily lives.

This can be a fairly simple process if P is the sole owner; however, there are instances where P is not. In this case, P is classed as a ‘trustee’ of the property in question, and when P loses capacity, they no longer have the ability to sign any of the legal documents. The deputy will therefore be required to complete this on their behalf.

However, deputies are restricted under the Mental Capacity Act 2005 to carry out any trustee functions and most deputyship orders do not allow the buying and selling of property owned by P without prior authority from the court. Therefore, an application to the court will always be required for this type of transaction. The type of application will depend on who owns the property. Below is a guide to help guide you through this process:

Who ‘owns’ the property?

How the property is owned will have a direct impact on the steps required in seeking a sale. Here is a quick refresher on the different ways in which a property can be held.

Sole proprietor

Thee property is owned in its entirety by one person, the sole proprietor.

In this instance, the deputy would be able to seek authority to sell/purchase a property solely using the standard application process. See below for further details.

 

Joint tenants

Each joint tenant will have an equal right to the whole of the property. Both joint tenants must agree to the sale of a property. On death, the share held by the joint tenant who is now deceased will automatically pass to the other joint tenant.

If P is a joint tenant and there is a continuing trustee (the other joint tenant) then an application will need to be made for permission for the continuing trustee to appoint one new trustee in P’s place, usually the deputy. This is known as a Sec.36(9) Trustee Act 1925 application.

 

Tenants in common

Each tenant in common will own a share of the property. Both tenants in common must agree to the sale of a property. On death, the share held by the tenant in common who is now deceased can be passed to another under their Will.

If P is a tenant in common and no other trustees are remaining, for example, if the other tenant(s) in common are now deceased or also lack capacity, then an application will need to be made seeking the appointment of at least two trustees in P’s place. This is called a Sec. 54 Trustee Act 1925 application.

 

The Application

The process of applying is similar in each case and requires a number of the same forms. An undertaking will be required from the existing and proposed new trustee(s) and additional documentation may be needed in cases where one of the trustees is now deceased or if a joint tenancy has been severed.  A fee will be payable (from P’s estate) to the court for consideration of the application.

In light of the complex nature of these applications, I would strongly suggested seeking professional advice and assistance in completing these applications.

General considerations when selling property

If you are looking to sell a property, you will also need to obtain/consider the following:

• Up to date valuations by at least 2 estate agents as well as information regarding their fees.
• Quotes for conveyancing fees by at least 2 solicitors.
• Where will P live after sale?
• What will happen to the sale proceeds?
• Potential clearance of the property – do personal items need to be stored/moved to P’s new accommodation
• Think of any items within the property that may be valuable and need valuing.
• Items within the report may be bequeathed under P’s Will, make sure these are kept before clearing.
• Notify insurance companies once the property is sold.

General considerations when buying property

If you are looking to buy a property, the following will need to be considered for the application to be considered:

• Price: does P have sufficient assets and how this will affect their available cash once purchased.
• Ongoing expenditure: is the property affordable in terms of ongoing utility costs, council tax and other relevant expenditure.
• Location: is the property within reach of required amenities, schools etc., within an area that P had agreed or would agree if they had capacity.
• The property itself has to be suitable for P’s needs. You may want to instruct an Occupational Therapist, or other experts, to consider what type of property would be most suitable for P.
• Insurance: make sure sufficient insurance is in place for both buildings and contents.

Selling/buying properties outside the UK

A deputyship order issued by the Court of Protection is only automatically applicable within England and Wales. It is not automatically recognised as a legal instrument for the buying and selling of property in oversees jurisdictions and even as deputy, you may still be required to meet other legal requirements in the jurisdiction in question.

If you wish to sell or purchase a property abroad for P then, on top of the application to the court to seek permission, you may also need to instruct foreign lawyers to advise on the requirements to be met in the country in question and additional legal documentation may need to be sought.

Again, seeking professional advice form a UK solicitor on this matter prior to the application being made is advisable.

FURTHER INFORMATION

If you would like further information or advice about the topic discussed in this blog, please contact Lauren Eyre in the Court of Protection team.

 

ABOUT THE AUTHOR

Lauren deals with the management of deputyships, with a focus on clients diagnosed with dementia and those that have suffered medical negligence resulting in serious brain injuries and long term impairments.