Property transfer - undue influence & unconscionability

[bevans5803]

Back again. Just had notification that my aunt is going to challenge a property transfer completed in 1998 and stated it was carried out with undue influence & unconscionability. You may recall that my grandfather purchased the house under the rent to buy scheme at the age of 72 using a 100% interest only mortgage. The property was then transfered into my partners name after 3 years and she took on the entire mortgage. He then lived in the property and paid a low rent and we paid the mortgage for the last six years and redeemed the outstanding amount last october. We have also maintained the property and recently offered to reduce his rent to �12.50 a week. The property now owes my partner in the region of 20k. Before he purchased the house he paid almost �50 a week in rent and he now has the oportunity provided he signs the most recent agreement, to rent the property for �12.50 a week. Because of property price increases in recent years my aunt probably thinks she's missed  out, and is trying to have the transfer into my name set aside on the above grounds. Off couse if she is successful the property would obviously be willed to her. Any thoughts. Does she stand a chance?

PS the arrangment has ran for years with the knowledge of family members and witout any problems. Its gone wrong lately because she's been causing trouble.

Nicola

[zmudge]

Evaluating alleged elder undue influence involves determining what the older person understands or understood in the past. Inducing someone to sign a legal document or give a gift, for example, may constitute undue influence if the person does not fully understand the transaction, appreciate the value of what they are giving away, or comprehend the implications of what they are doing. The first question raised in undue influence investigations is "did this person understand what he or she was doing when he gave a gift or transferred property. Was coercion, trickery, or undue influence employed?" Undue influence is when an individual who is stronger or more powerful gets a weaker individual to do something that the weaker person would not have done otherwise. The stronger person uses various techniques or manipulations over time to gain power and compliance. They may isolate the weaker person, promote dependency, or induce fear and distrust of others. Because undue influence, like mental capacity, raises the question of whether an individual is acting freely, the two concepts are often confused. Diminished mental capacity may contribute to a person's vulnerability to undue influence so it is the Court which determines whether or not undue influence has been exercised. In doing so, the Court considers a variety of factors, including whether the transaction took place at an appropriate time and in an appropriate setting and whether the older person was pressured into acting quickly or discouraged from seeking advice from others. The Court also consider the relationship between the parties, and the "fairness" of the transaction. In your case it is only the 1998 transaction that will come under intense scrutiny  by cross examination (not how you have behaved since), and if undue influence is found it will be set aside with all costs down to you.

With compliments zmudge

[bevans5803]

Thanks

[bevans5803]

Thanks Zmudge. I will go into a little more detail. In 1995 an arrangement was made with my grandfather to purchase his council house via right to buy scheme.This was done with the knowledge of several members of the family, in fact my sister started the ball rolling as she wanted to buy it but never got round to it. He was happy for someone in the family to do this because he wanted the property to stay with the family and of course it was an oportunity for him to reduce his housing costs, provided it didnt cost him anything and provided he could have cheaper rent. My grandfather would only be allowed to purchase the property if he kept it for a minimum of 3 years. A 100% interest only mortage was obtained then after the 3 years he transfered the property and all of the mortgage into my partners name. Solicitors were employed and worked on his behalf to complete the work and a tenancy agreement was put in place in 1998 with rent at �25 per week. Remember he previously paid the council �50 per week. My partner has now paid off the entire mortage and no one has ever complained about the arrangement until now.When the transfer was completed in 1998 the property was worth approximatly �21,000 we took on the mortage debt of �12,500 so there was a gift element there however he would get that returned over the long term with reduced rent and he would not be responsible for the maintenance of the property. I should also point out that his daughter (my mother) was happy with the arrangement and even signed the first tenancy agreement made in 1998 as a witness.His solictors even wrote a will in which i was named as the beneficiary of the property in the event of his death during the 3 year period the property was in his name. Any  more thoughts on this. You say that the loser would be liable for all costs if the court set aside the transfer, what about the 20k the property owes my partner.

[zmudge]

Hello, Nicola. You open by saying that you have received notification of your aunt's intention, and to assist me in understanding this what exactly have you received? A solicitor's letter, writ or something else? If it is not too long, could you please type here the exact core of the notification - leaving out the identifying bits, of course. Did your aunt ever own the property or have money in it? Has your aunt power of attorney from your grandfather? Could your aunt have obtained permission to do this from your grandfather? I am trying to establish where your aunt has obtained a legal right to sue you for undue influence, because on the facts so far she has none. Could you also say, please, which legal jurisdiction you are in ? (England/Wales, Scotland, Northern Ireland etc).

[bevans5803]

Zmudge thanks again. I have not been served with anything yet but i know its on the way. It is an application to the court to set aside the transfer carried out in 1998 on the grounds of undue influence and unconscionability. I believe it will be a summons but as soon as i get it i will come back to you. My Aunt never invested a penny in this arrangement but she has known about it for a long time. My Aunt never had power of attorney but she may have it now because the old boy is unwell. She is definitely acting as some sort of representitive of my Granfather, but it is my Grandfather who will be making the application not my  my Aunt. Sorry for confusing you. Area is Wales.

Nicola

[zmudge]

Understood. If you receive a summons attached to it will be a statement probably written up by a barrister setting out exactly what they are pleading. If you just set out the basic allegations in another post on ABankI will see if I can make useful comment. But, of course, this AnswerBank natter is not in any way at all a substitute for a solicitor, and I'm afraid that you will have to appoint one if you receive a summons.

[bevans5803]

Thanks again. A soon as it arrives i will come back to you.

Nicola

[Didwot]

I recall that you asked a few questiona about this a little while ago. Youi said that your father was not suffering from dementia. If he is mentally capable of dealing with his own affairs I do not see how your aunt proposes to get leave of the court to act on his behalf. I recall that I flagged up the question of your grandfather's mental capacity at the time of the transaction when I replied to your earlier posting. I suggest that you start to get the necessary evidence together to rebut your aunt's claims now. Tell the solicitor's who acted at the time., and make sure that they have their file available; sound out anyone who knew what was happening at the time, and also people who knew your grandfather, and find out what they recall, and if they would be willing to give evidence. If your partner is sued then he will have to act quickly to defend himself. It would be worth seeing a solicitor now, and giving preliminary instructions, and preparing statements of your, your partner's and any other potential witnesses' recollections.

[bevans5803]

Didwot nice to hear from you again. Its not my aunt who will be making the application, sorry if i gave that impression. My Grandfather is making the application, my Aunt is his representitive. She

[bevans5803]

Didwot nice to hear from you again. Its not my aunt who will be making the application, sorry if i gave that impression. My Grandfather is making the application, my Aunt is his representitive. She is

[bevans5803]

Didwot nice to hear from you again. Its not my aunt who will be making the application, sorry if i gave that impression. My Grandfather is making the application, my Aunt is his representitive. She is the one

[bevans5803]

Didwot nice to hear from you again. Its not my aunt who will be making the application, sorry if i gave that impression. My Grandfather is making the application, my Aunt is his representitive. She is the one driving this

[Didwot]

Sorry not to be too specific. I assumed that if your aunt was acting as grandfather's representative, then she was bringing the application on his behalf. If he is mentally capable, and wants to make such an application why does he not do so, and if he does not why does he not tell your aunt to take a hike?

[jean88]

We had a similar problem in our family, it would be better to sort it all while your grandfather is still here. So is your grandfather making all the applications, does he really want this? or because he is ill and been influence by your aunt? then you have to proof he is under undue influence and unconscionability. If he owed property to begin with and he is making applications that should be a difficult one. Why dont you settle it out of court? Have a family meeting to discuss this and compensate them with a fair amount you both would agreed. That was how our family problem ended, but making sure you have all your family members as witnesses, made them sign a agreement or use a solicitor.

You should seek legal advice and if they have a case, it could go both ways. There is a chance you might loose out, so enquire and consider other method than court.

Good luck