Seventy percent of the properties on Cognatum’s retirement estate are inherited before they are sold. The majority are inherited by the children of the owners.
While inheriting a property on a retirement estate is similar to inheriting a mainstream property, there are decisions that will need to be made, and immediate actions that beneficiaries will need to take.
John Lavin of Cognatum Property explains what beneficiaries should be thinking about, and offers advice to those who find themselves the owners of a property that is likely to have an age restriction on the lease.
John says: “Most management companies and/or landlords of retirement properties will have a protocol for managing properties whose owners have died. Often there will be a relationship already with the owners’ families. So this is a good first call. Find out what regular payments will need to continue, such as insurance, utilities, Council Tax, service charges, etc.
“If your plan is to sell the property, you won’t be able to do this until probate is complete. But preparations can be made in terms of research and preparing the property for sale.
“My advice to beneficiaries would be to start organising the contents of the property but not to try to do it all at once. Firstly, retrieve precious items such as top-line documents, paperwork, valuables, photographs, and memorabilia.
“Don’t rush the main clearance – it’s a good idea to bring the wider family together so they can take items you don’t want. Retain major pieces as the property will look better if it’s furnished. The rest can be dealt with by charities or house clearance organisations.
John explains: “Your immediate inclination may be to sell the property, but there are other options that are worthy of consideration. Furnish yourself with as much information as possible as to the likely sale value, but also whether renting the property out is a possibility under the terms of the lease, and whether that would make financial sense. Finally, don’t rule out the possibility of moving into the property yourself.
“Some retirement companies charge an ‘event fee’ if a property is transferred or let out. Cognatum doesn’t charge these fees, but they can be as much as 10%, so ensure you are in full possession of the facts before you make final decisions.”
John comments: “Achieving the best possible price for a relative’s home can be challenging, but an attractive property on a well-managed estate, especially if it has been properly prepared for sale, should have held its value as well as any property on the mainstream market.
“The first issue is of course that it is a covenanted market, i.e. only buyers of a particular age, usually over 55, can purchase. So it’s important to use an agent who is either a specialist or one who understands this sector and can demonstrate considerable experience and successful similar sales, ensuring that they highlight services offered by the estate and benefits such as guest accommodation and communal space.
“We would suggest that modifications are removed from retirement properties. The majority of buyers of retirement property don’t need stairlifts or handrails, and the property will present better without them.
“Over 60% of our residents have lived in their house for over 15 years, so deep-cleaning, re-carpeting, and painting throughout is generally recommended before marketing. Some rearranging may also be beneficial, upgrading the kitchen or creating some more open plan living. Whilst some buyers of retirement properties are looking for a “project”, most want a move without the need to upgrade and refurbish their new home.
“Houses tend to look bigger, and sell better if they are furnished, but keep furniture to a minimum, use light fabrics, keep everything simple and impersonal. If the house has its own garage, don’t make the mistake of cluttering it in the process of de-cluttering the house!"
He concludes: “While the property is on the market, ensure that the property and garden are kept tidy, the post is picked up, the property is heated, and that lights are on for viewings. On a managed estate the estate manager will be able to take care of this. A property can feel very unlived in extremely quickly.”