Handing Over Property to Your Children? Are You Properly Protected?

It is only natural that many parents wish to give property to their children or sell it to them on preferential terms – however, 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 premiums 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, however, the First-Tier Tribunal 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.

Dodd v Walker. Case Number: REF/2013/0964