Buying or selling property on behalf of a protected person, trust or estate
Are you an attorney, deputy, trustee or executor looking after another person’s affairs or managing funds held in a trust? If so, you will know that you have a legal duty to act in the best interests of another.
In this role you need to act to a higher standard of care and due diligence. For example, a risk that you may be prepared to take personally should you be the one buying or selling a property may not be an acceptable decision when you are acting in this special capacity.
If you fail to act in the best interests of another, you risk action being taken against you by the Court of Protection, the Office of the Public Guardian or by any of the beneficiaries.
Executors
You may be selling a property on behalf of an estate. If so, as an executor you will need the Grant of Probate before being able to formally exchange contracts on any sale, although the transaction can proceed up to that point.
As an executor you should be wary of completing the “protocol forms”. These are property information forms, fixtures and fittings forms and, in the case of a flat, the leasehold information form. As executor you will be deemed to have no personal knowledge of the property (even if you are a family member) because you do not reside in the property. If information is wrong because you simply guessed, you could find yourself being sued for misrepresentation. It is therefore usual that the property is sold with limited title guarantee and “as seen”.
Trustees, deputies and attorneys
Alternatively, you may be looking to buy or sell a property which may be more suitable to the needs of another person.
It is important to ensure that the document which appointments you as a trustee, deputy or attorney (court order issued by the Court of Protection/ Power of Attorney /trust deed, such as a Personal Injury Trust or a Family Trust), actually provides you with the power to buy and sell property.
A Power of Attorney or trustee powers will provide you with sufficient rights to enable the sale and purchase of a property. That is unless this particular power has been restricted in the document. You should therefore check the terms of any trust deed appointing you.
If an application to the Court of Protection is made for a court order to appoint you as a deputy, it is important to ensure that the court is specifically asked to grant a power to buy and sell property. Many people do not realise that this is not an automatic right. If you do not, you will need to ensure that a further application is made to provide you with this power which could take some considerable time.
Similar to executors, as a trustee, deputy or attorney, you should be wary of completing the protocol forms because you are not the legal owner or in actual occupation of the property. You are deemed not to have personal knowledge, even if this is a family property.
Although you may hold information on maintenance and repairs from your account keeping, this can be provided separately and should not be the basis of completing the protocol forms. This is for the same reasons explained previously regarding the risk to yourself or action being brought against you.
There are other issues which you will need to consider, such as will stamp duty be affected by the type of trust which exists. The rules for stamp duty will be slightly different depending on the type of trust held and whether the protected person is under or over 18 years of age.
If you are purchasing a larger property to enable you to reside with, and care for, the protected person, then additional consideration will be needed to determine if a declaration of trust should be put in place. This is especially so if the protected person is under the age of 18 to allow you to demonstrate to the Court of Protection, or the Office of the Public Guardian, that your contribution towards utilities, maintenance, insurance etc. are being taken into consideration. This should hopefully help to avoid any allegations of financial abuse.
The transaction
Whatever the reason, buying or selling a property can be a stressful time. This can be slightly more complicated by the fact that you are acting in this special capacity whilst possibly juggling caring responsibilities, work and/or family commitments.
Therefore it is important you choose the correct person or firm to act for you and that you ensure they have sufficient understanding of the role that you hold, and how it impacts on sale or purchase transactions. These special roles can have numerous issues which need special attention or consideration.
I am a solicitor with extensive experience in acting for attorneys, deputies, trustees and executors when selling and purchasing residential property. I therefore understand the role you hold and how you may be accountable to the Court of Protection or Office of the Public Guardian.
Having someone acting for you who has this specialist knowledge will undoubtedly help ease the conveyancing process for you and ensure you do not put yourself at unnecessary personal risk.
If you are considering buying or selling a property on behalf of a trust or a Power of Attorney, or selling an estate property, please do not hesitate to contact me directly via donna.butler@GAsolicitors.com or call 01752 203500.
Donna Butler, associate