Bequest of lease in my will

[HazeltonLane]

Hi all,

I am writing my will and want a family member to inherit the lease on my flat (900+ years remaining) so they can live there or sell it as they desire.

However…

The lease states the following under the section entitled Lessee's obligations:
"The Lessee shall dispose of the premises only by way of assignment of his or her entire leasehold interest in it to a Qualifying Person as defined in the DMHU Agreement."

Does this mean my relative won't be able to live in the flat and that it will have to be sold when I did, according to the DHMU Agreement?

[sgclacy]

I am unfamiliar with the term DMHU agreement and google surprisingly does not enlighten me

I suspect that this restriction may have meant the price you paid for the flat was reduced and accordingly whatever intention of the term was must be upheld

[nukecad]

What does that 'DMHU'/DHMU?'(whichever one it is) agreement define as a 'Qualifying Person'?

[HazeltonLane]

Thanks both. Yes, the DMHU (Discounted Market Housing Unit) Agreement dictates the terms under which I can sell the lease. I have to sell it for a 30% discount off the market value, and to a person on the Council's waiting list for affordable housing.

"Qualifying Person" — see attached.

[sgclacy]

I would think it is clear that you can't leave it to a family member - to do so rather defeats the object of the scheme. The property is sold to you at a reduced price with the terms spelt out in the lease so that the property can be occupied by persons on lower incomes

Your executor would have to dispose of it to someone on the Homeseekers Register

[HazeltonLane]

Thank you for the clarification. I am very glad I asked.

[vmart]

I've not read you attachment and possess no knowledge of this scheme. However, I would definitely at least speak with a solicitor (perhaps via the solicitor assisting with your will) to confirm details as there may be succession rules under Landlord & Tenant Act if for instance the relative you referred to is a close family member or is living with you. Anyway just thoughts for you to consider.

It may be LEASE can assist so why not book a free appt with them to discuss.

[Lawcruncher]

I am all for DIY wherever possible, but drawing up your own will is a bad idea. It is especially a bad idea if you own land. In your case it is a very good idea as you need a lawyer to tell you what restrictions, if any, there will be on passing the property on by will. I suspect, but without seeing the relevant documentation cannot confirm, that there is no restriction on how the property devolves on the death of the tenant. There may be restrictions on who can occupy, but that is not the same as own.

[HazeltonLane]

Thank you Lawcruncher and vmart

I will ask the Leasehold Advisory Service. I have had good dealings with them in the past.

The solicitor who drew up my will was also my conveyancing solicitor when I bought the lease so perhaps he is not completely "on the ball".
I also bequeathed the payout on my life assurance policy to a different family member and subsequently found out this should not be in my will… so I think I might start again with one of those charity will-writing services. My will should theoretically be very simple.

[nukecad]

I think that clause is to restrict who you can sell the property to, but as Lawcruncher says selling it is not the same as leaving it in your will and will probably be covered elsewhere in the lease.
(Probably with a similar restriction that whoever inherits can only sell to a qualifying person, etc).

[Lawcruncher]

I will ask the Leasehold Advisory Service. I have had good dealings with them in the past.

No harm in doing so, though bear in mind that they are not infallible.

The solicitor who drew up my will was also my conveyancing solicitor when I bought the lease so perhaps he is not completely "on the ball". I also bequeathed the payout on my life assurance policy to a different family member and subsequently found out this should not be in my will… so I think I might start again with one of those charity will-writing services. My will should theoretically be very simple.

There may of course be nothing in the lease which prevents your family from inheriting it.

When it comes to wills it is best not to think that your case is straightforward. It is important to get a will right as a badly drafted will can cause problems or fail to achieve what you want. When looking for someone to draw up a will it is a question of finding someone with the level of expertise to fit your case. The problem can be that you do not know what level of expertise you need.

A rough guide to whether a lawyer is on the ball when you instruct one to draw up a will (or indeed on any matter) is whether he just notes what you want or asks questions and/or makes suggestions. When giving instructions you need to tell the lawyer what you want to achieve and give him an idea of what your assets are and their value. Clearly in your case the lawyer needs to see the lease and the insurance policy.

[HazeltonLane]

This is the advice I received from Lease. So, as Lawcruncher said, they are not infallible!

"Transferring property under a will would amount to an assignment. I would suggest you take advice from a conveyancing solicitor on whether there are any exceptions to the DHMU Agreement if you are transferring the property under a will."

[HazeltonLane]

This is the advice I received from the Leasehold Advisory Service. So, as Lawcruncher said, they are not infallible!

"Transferring property under a will would amount to an assignment. I would suggest you take advice from a conveyancing solicitor on whether there are any exceptions to the DHMU Agreement if you are transferring the property under a will."

[Lawcruncher]

"Assignment" can be both general to refer a number of instruments which transfer property and, more specifically, to an instrument transferring a lease. However, a transfer of property by personal representatives to beneficiaries is usually referred to as an assent. The name of the document is not though important, What is important is precisely what the DMHU agreement and lease say. Whatever it says, one thing is certain and that is that, if you make a will, on death the property will vest in the executors by operation of law. What the executors can do is is however (possibly) controlled by the DMHU and/ore lease.

You have given us the definition of "Qualifying Person", but we also need to know what the agreement and lease say about transferring/assigning the property if we are to take this issue further.

[HazeltonLane]

Lawcruncher
Many thanks for your help. The documents are viewable at the links below.

Lease (relevant section starts at 20.2)
https://drive.google.com/file/d/10Xs...ew?usp=sharing

DHMU agreement
https://drive.google.com/file/d/1Yjh...ew?usp=sharing