Selling property of a mentally incapacitated person
Selling property without consent
If you’re selling property for a mentally incapacitated person you need to make sure you’ve got legal authority.
If you transfer property or try selling property without consent on behalf of a mentally incapacitated person it is unlawful.
A sale or transfer must be authorised by the Court of Protection or a registered Lasting Power of Attorney.
Many families try to deal with the property and financial affairs of elderly relatives in an informal way but there are risks. It could be an expensive mistake to make.
There’s a cautionary lesson in the case of JS v KB & Anor 2014.
The Court of Protection ordered a woman to pay costs of £70,000 after she was involved in selling property belonging to her mentally incapacitated mother. The sale proceeds were used to buy another property in the daughter’s name without legal authority.
A dispute with the woman’s brother about the property transactions led to the matter coming before the Court of Protection.
The court decided who should pay for the costs of the proceedings.
The Court said the woman’s actions “….caused a deep schism within the family, generated lengthy and avoidable litigation, and caused the parties to expend considerable sums which they can little afford in legal costs.”
The Court concluded the woman’s mother:
- hadn’t received any independent legal advice about the sale of her property, and:
- she didn’t have the mental capacity to understand the details of the property and financial transactions that took place.
The woman didn’t have any legal authority to manage her mother’s property and financial affairs. No one automatically has the right to make decisions about the property and financial affairs of a mentally incapacitated person, even if they are a relative.
The court decided the woman had failed to consider that her mother was financially and emotionally vulnerable. She had also failed to consult properly with other family members.
A dispute will lead to the Court making a costs order
In JS V KB and Anor 2014 the Court took the view that there wouldn’t have been grounds for a dispute with the woman’s brother if she hadn’t been selling property without consent. So the court ordered her to pay the costs of the court proceedings.
The Court of Protection has the power to examine the actions of anyone who sells the property or other assets of a mentally incapacitated person. The court has a duty to protect the rights and freedoms of an incapacitated adult.
You could face serious financial penalties if you are selling property without consent even if your intentions are well-meaning.
Find out more about the Court of Protection here
Read about the author Rosamund Evans
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