What is an inherited property?
Unfortunately, someone has passed away and they have left the property as a result you inherit a property in UK. The property is either given to the next of kin or it may be on the will that it goes to the children. So there might be more than one sibling involved and they have to now take possession of that property. There’ll be a time where you go through probate and then the probate will decide how the proceeds will be divided if there’s money involved, outstanding money on the property, mortgage, etc. So they’ll go through a process as that process of a probate process that has to go through.
There are several choices that one has to go through during this probate.
- Sell The Property
- Rent Out The Property
- Moving In Yourself
- Involve Solicitors
- Taxes
- Mortgage Obligations
- New Landlord
I’m going to cover about seven of them. So what a choice is when you now have this property.
1. Sell The Property
The first choice when you inherit a property is to sell the property. You can go through the normal channels, to an estate or agent and try and sell the property. Or you can try and solve problems in yourself through a sale on the owner’s website. Or you can choose the life of your business to get a quick selfie of the property as well. So there are challenges when it does come to selling because the property may be outdated it’s not being decorated for a long time. If it needs a new bathroom, a new kitchen. So to get the best price possible, you may have to invest and do some work on the property first.
2. Rent Out The Property
The next option you can do when you inherit a property is you can rent out the property. But to rent out the property you’ve got to make sure that the standards are right, for example, the electric fuse box needs to be current, you need to have a current gas safety certificate. The property has to be of a certain standard for example sometimes you have the old tiling. If you have polystyrene installed and if it is caught by fire. It’s actually a fire hazard.
So if you have that on the ceilings, those have to be removed to let it out, the best-looking property is let quicker. So if this call, for example, holds wallpaper on their old carpets, sometimes people have carpets in the bathroom, things like that, things have to be addressed. So the properties brought a good standard, a good level of quality to attract the right type of tenant.
3. Moving In Yourself
Thirdly, you could choose when you inherit a property is the option of moving in yourself. Now, this may be difficult if there are several siblings involved. Because usually, they will want to sell the property and divide the proceeds amongst themselves. While in for example it’s just yourself and you don’t mind staying in the property because obviously if it was a relative it may have, you know, you may have some feelings towards staying there.
You might not be comfortable with staying there. That’s all thing but there is an option. That option you could actually move into the property yourself, renovate the property to a certain standard and live there yourself and continue paying a mortgage if there is a mortgage there.
4. Involve Solicitors
The fourth thing I would say is you need to involve solicitors in your dealings to make sure things are done fairly and properly and professionally.
5. Taxes
The fifth thing to consider is taxes. You’re going to get taxes from income if you sell it for example if you sell it you’re going to have a thing called capital gains, which you have to pay as a tax. The second thing is if you let it, you also have to pay a tax because you have to pay a tax on the rental of income that’s coming in from the property.
6. Mortgage Obligations
Number six is the mortgage obligations. If there’s an outstanding mortgage then you as the owner, always the new owner will now be obliged to satisfy that obligation. You would need to be paying the mortgage that’s outstanding for that property. However, in some cases, some people have life insurance and that life insurance policy could kick in and take care of the mortgage payments. So you need to look into that and find out what the current situation is and what you need.
7. New Landlord
And lastly, number seven, if you are taking over a property and it has tenants in it, then you are now the new landlord. So this would mean that you have to take care of — make sure to council tax is paid, make sure that gas safety is up to date, make sure electrical certificate is done, if there are any damages on the route take care of that, if there are any damp or situations like that, you need to take care of water situation.
So you are now a landlord, so you’ll be obliged to repair, take care of any repairs, and also make sure that the mortgage obligation is met as well. You could alternatively, depending on the relationships you have with the tenants or the person that was there before had with a tax. You may be able to negotiate with them to get them to move out or evict them but in this current coronavirus time, the new law says that you cannot evict tenants for three months. For the next three months.
We’re not in March. So for the next three months, you’re not allowed to evict a tenant, so the eviction process might be a bit difficult to go down that road. If you do have tenants in there, you could perhaps leave the tenants in there until this time has passed and then work out with what you’re going to do, whether you want to increase the rent or whether you want to evict the tenants and you know, get the property sold or get different tenants in there that pay more rent.
Summary
So I hope those seven points help, that gives you some kind of indication if there are some of the things that you can do. It’s not everything you can do, it’s not an exhaustive list but some of the things that you can do to help you with your inherit a property.