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Need to Release Cash from Your Home Quick? Be Careful

on Wednesday, 29 May 2019.

Schemes to release cash from your home quickly can sound appealing, but things can go wrong…

A couple purchased their home 35 years ago. They got into financial difficulties and saw an advertisement for a company that offered sale and leaseback arrangements, ie the chance to sell their home but continue living in it.
 
The company acted as the agent of the couple's future landlord. They were assured that as long as they paid the rent, they would be able to remain in the property for the rest of their lives. 
 
They signed a blank transfer deed transferring the property to their new landlord as well as a five-year tenancy agreement. Though the couple questioned the length of the tenancy agreement, they were assured that it was just to make sure that they paid the rent. The ownership of the property was registered in the landlord's name. 
 
After expiry of the five-year term the landlord began court proceedings for possession of the property and to evict the couple from their home.
 
Usually it is difficult to defend claims for possession like this. It looked as if the couple were going to lose their home of many years.
 
Luckily there is a legal doctrine known as 'estoppel'. If someone relies on assurances from another and as a result changes their position to their detriment, the other person is 'estopped' from denying the assurance. It stops someone going back on their word.
 
The judge decided that this principle should apply in this case. There had been a sale at an undervalue, the couple had relied on the company's assurance to their detriment and the landlord was therefore estopped from seeking possession. 

To discuss sale and leaseback arrangements for your home, please contact David Marsden, in our Commercial Property team on 01923 919 303.

 

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