Tenants and Equity Release

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Sixteen years ago, when my partner died, as his ‘common law wife’ I was entitled to no part of his estate (except our house- which we had bought jointly) even though we had lived together for nineteen years. He had, at the time, a fairly substantial property rental business which passed to his children - I had none of the rights of a wife which would have entitled me to inherit his business assets. Now, sixteen years on, it seems that lodgers can make a claim against my estate just by renting a room from me. I am assuming that in that time the law has changed and I have not noticed, although I take an interest in these things so I am surprised I didn’t notice.

I was talking to a friend last night who told me that her son, who is training to be a doctor, can only rent accommodation on a fixed one year assured shorthhold tenancy and then he has to move out. This has happened to him four times so far and seems to be common practice - although I hadn't heard of this either! I assume this arrangement is to prevent tenants from establishing inheritance rights such as my current tenants have in my house, according to Equilaw.

My question in relation to tenants and equity release is what kind of tenancy can I give future tenants that would would NOT give them rights to my estate?

Two options occur to me and I’d welcome your opinion on them: one is to take part-time lodgers, Monday to Friday, who have a home elsewhere and pay council tax at another address. The other is the option outlined above where tenants are given a fixed term and have to leave at the end of it. Would either of these options remove the entitlement to claim against my estate as far as equity release is concerned?

I ask because I fear I might have to get a waiver, and pay a fee to Equilaw, each time my tenants change, which would be expensive in the long term.

Interestingly, the impact on the housing market of tenants acquiring the right to claim against the landlord’s estate must be far-reaching: imagine the insecurity of having to move home every year (I’m assuming this only applies to room tenancies in your own home and not to apartments or houses - that would create chaos!).

07/03/2017 08:58

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