I am dealing with an estate where by one of the beneficiaries has been given a right to reside in the property. The beneficiary has had the property surveyed and it needs work doing for it to be a livable conditions. Extensive work is needed, which will cost a lot of money. The beneficiary wished to buy the property, but wants the sale price adjusted to reflect the work that needs to be done. The beneficiary only inherits 15% of the estate, while the remainder will be going to 3 charities. My question is whether the executors, who are not beneficiaries, have a duty to repair the property so that is habitable? or ignore the wishes of the said beneficiary and sell the property as is and at market value and give the beneficiary their share of the sale proceeds. There is nothing in the Will which expresses any such duties on trustees, it only has the usual clauses for the beneficiary who has a right of occupancy to keep the property insured and and keep the same in good repair and condition.
I recall that the obligation to “keep (a property) in good repair” includes the obligation to put it into good repair. If that is the case, then the beneficiary who has a right of occupancy is also liable for the costs of doing so.
If the beneficiary is looking to purchase the property from the estate, I suggest either that the terms of the transaction (including the price) must be agreed by the charity beneficiaries or the property put on the market and the beneficiary allowed to offer alongside with the general public.
If the beneficiary is not in occupation, and is not involved in the sales process other than as a potential buyer, an open market disposal might be the preferred option. If the beneficiary is in occupation, then the charities might have particular views as to how any sale process might proceed.
Despite the beneficiary’s right to occupy granted by the will, as they only have a 15% entitlement to residue the other beneficiaries, together, may well represent the majority view for the purposes of s.11 Trusts of Land and Appointment of Trustees Act 1996. The beneficiary in question cannot, therefore, seek to dictate what is to happen.
Paul Saunders FCIB TEP
Independent Trust Consultant
Providing support and advice to fellow professionals