It is often the case that when a person dies the biggest asset they leave as part of their Estate is their property.
In areas of the South East of England especially, the equity in such properties could be substantial. It is therefore very important for the executors to secure that asset, sell it on the open market, and obtain the sale proceeds for the beneficiaries under any Will or Intestacy.
So, what happens if this extremely valuable asset cannot be sold because someone is living in the property? What happens if the person who lives there is not on the Title Deeds, but refuses to move out and give vacant possession?
Although there are several different ways to negotiate with a person to obtain vacant possession, (in some cases forcing vacant possession through a Court Order), the time taken in doing so could be several months depending on the complexity of the issue, and any third party or Court timescales.
An Executor or Administrator can therefore consider charging the person in that property what is known as Occupation Rent. This form of rent does not originate from any type of tenancy agreement, but it enables the Executor or Administrator to charge the person for their occupation.
The formula to calculate Occupation Rent is, in theory, starightforward: the Executors should research and obtain professional opinions from experts on the potential open rental market value of the property. This is the basis for calculating the financial benefit that the party living in the property has effectively “received” whilst in occupation.
For example, if a two bedroom property could be rented out at £1,000.00 per month, and a person occupied it for 12 months following the death of the owner, then in theory the Executors could effectively “charge” £12,000.00 to that person and request payment of this sum to the Estate.
It should be noted however that specific circumstances of your case must be reviewed before concluding that Occupation Rent can be charged.
It is sometimes the case that in fact one of the Estate beneficiaries is living in the property and therefore receiving the benefit of that property when other beneficiaries of the Will or Intestacy are not. If this is the case, the Executors/Administrators may consider withholding a proportion of that individual’s calculated inheritance to factor in this Occupation Rent, enabling that proportion to be split between the other beneficiaries.
Although this may sound like a simple and easy approach to take, Executors/Administrators will have to satisfy some legal requirements before they can withhold or charge Occupation Rent.
Also, should there be a dispute between parties on whether Occupation Rent is indeed payable, it may be necessary to make an application to Court under TLATA 1996 where the Court can consider the specific circumstances in more detail on behalf of either the Estate, or the person who has been in occupation of the property.
In summary, although it can be an emotionally difficult time if you are trying to act upon the deceased’s wishes and a person will not vacate a property, there are options available to try to mitigate the loss to the Estate of an occupying party.
Handling claims of Occupation Rent and obtaining vacant possession of probate properties is an area of law handled exclusively by our Contentious Probate team. If you need advice in this area, please contact us on 0118 958 9711 or email [email protected].
We offer an initial £95.00 fixed fee meeting where we can discuss your case in further detail and offer you tailored advice on your position, whether you are an Executor of an Estate or a whether Occupation Rent has been demanded from you.
Get in touch
Hilary Buckle offers a fixed fee initial meeting of one hour to discuss your personal circumstances, your options and your next steps, at a cost of £95 (inc VAT).
Hilary specialises in all aspects of private client work, including Wills, trusts and probate matters. She is a member of the Thames Valley branch of the Society of Trust and Estate Practitioners, Solicitors for the Elderly (SFE) and an associate member of ACTAPS (the Association of Contentious Trust and Probate Specialists).
If you would like to know more or arrange a fixed fee appointment, please email her at [email protected] or call her on 0118 958 9711.