The following query has been raised by a conveyancer:
In 2015, parents transferred the legal title of their property to their only daughter. They all then signed a tenancy agreement in favour of the parents. A lease was then registered on the legal title. One parent has died, the other is in a care home, having lost mental capacity. The Local Authority has disregarded the value of the property and daughter has a registered LPA for her surviving parent, in her favour only. Daughter would now like to sell the property, however the land registry will not agree to remove the reference to the lease from the land register as:
The tenancy agreement states that the term “may only be determined … by the death of both tenants”;
The attorney owes a fiduciary duty to the principal and to alter their legal position must be in the best interests of the donor. By making the application, the attorney (daughter) is benefiting herself to the detriment of the donor; and
There is no surrender provision and the tenant lacks capacity to surrender his interest.
I have been asked if a trust, possibly a life interest trust, is in place. The tenancy agreement is signed as a deed by the parents and daughter. The daughter is named as the “Landlord”, and the parents as the “Tenants”. The property is described. The rent is one peppercorn. The term is the “lifetime of the Tenants” which may only be determined “from the date hereof by the death of both Tenants”.
There are covenants, i.e. pay rent, pay rates, keep fixtures and fittings in Tenantable repair, not to make alteration without the consent of the Landlord, not to assign, underlet or part with the possession of the premises, not to take in lodgers.
It is then signed as a Deed. Has anyone encountered such a set up before? I am not sure that the intention of the daughter as a possible Settlor, was to create a trust as we did not act for the family in 2015, (although the other two of the three certainties appear to be satisfied).