Owning Life Tenancies

A Life Tenancy is a unique investment which comes with some expectations & obligations, both legal and otherwise.

Ownership

A Life Tenancy is a unique investment which comes with some expectations & obligations, both legal and otherwise.

Homewise is passionate about ensuring that all Life Tenants see their chosen property as their home and respect it as if they owned it themselves.

From time to time, Life Tenants do contact Homewise (or their Provider) to seek clarification on any questions or concerns they may have, and the expectation on you is that you continue to support their life tenancy by providing a fair, friendly and transparent service in line with the Code of Conduct.

Code of Conduct

Treat the Life Tenants with respect and dignity in any reasonable requests received from them.
Communicate effectively and promptly with the Life Tenants.
Ensure the personal data of your Life Tenants is handled in line with current data protection legislation.
Notify your Life Tenants in the event of any changes in your circumstances.
Refer to the Life Tenants as ‘Lifetime Lease Owners’ rather than ‘Tenants’. The HFLP offers a security of tenure for Life Tenants that differs from an Assured Shorthold Tenancy (AST) or other similar tenancy.
There is an expectation that you will not contact the Life Tenants for any purpose other than those provided for under the HFLP, except where such contact is invited by the Life Tenants or there is an unforeseen circumstance or emergency requiring contact to be made.

Rights of Life Tenants

Life Tenants have the right to:

peaceful enjoyment of the property.
redecorate the property at any time without having to ask permission, provided the works are of a non-structural nature.
cohabit with a companion, carer, or friend, subject to providing the required waiver and indemnity documents.
transfer the HFLP to a new property, subject to the Provider approving the new property choice (not to be unreasonably withheld) and the Life Tenant covering all standard costs of selling, purchasing and moving, including the legal costs of both the Provider and their own legal costs.

Obligations of Life Tenants

Life Tenants are obligated to:

maintain and repair the property.
pay for all outgoings, including all utilities, bills and council tax.
reimburse the investor for the costs of their buildings insurance policy on an ongoing annual basis.
adhere to the terms of the buildings insurance policy.
use the property as their main residence.
not use the property for any business or trade.
not assign, transfer or underlet the property.
get planning approval and seek permission from the Provider prior to carrying out any works of a structural nature.
complete and sign a Certificate of Occupancy once a year.

Rights of the Investor

The Investor (Provider) has the right to:

inspect the property once every three years, by prior appointment, to ensure that there are no immediate reparatory works required and that the HFLP terms are being adhered to.
request reimbursement from the Life Tenant of any immediate reparatory works/associated costs if they are required to fund this initially.
require completion of the Certificate of Occupancy on an annual basis.
ensure that, in the case of a transfer of the HFLP to another property, any proposed substitute property meets their reasonable substitute property criteria.

Obligations of the Investor

The Investor (Provider) is obligated to:

allow the Life Tenants to live in the property free from interruption, provided they are adhering to the terms of the HFLP.
obtain buildings insurance cover for the property (please note, with a leasehold property this obligation may be satisfied by any block policy in place as is usual for leasehold properties).
submit a claim to the insurer if/when notified by the Life Tenant that an insurable risk has occurred.
promptly respond if/when contacted by the Life Tenant.

Property & Lease Management

A Life Tenancy requires minimal management time, however there may be occasions when the investment will require additional time and resource to ensure the Provider and Life Tenants’ legal rights and obligations are adhered to.

Should you wish for Homewise to manage your investment on your behalf, the company can take care of the day-to-day requirements of your investment with the aim of minimising your involvement and maximising your return.

The activities to be undertaken by the property management team include:

Providing the first point of contact for the Life Tenants.
Triennial inspections of the property.
Undertaking annual occupation audits.
Managing and reporting on occupancy changes.
Managing situations where the Life Tenants default on their obligations.
Administering the initial buildings insurance and ensuring that the Life Tenants pay the annual renewals.
Managing and reporting on any requests for structural alterations.
Assisting the Life Tenants to move home under the Lifetime Lease if requested under the terms of the Lifetime Lease.
Establishing vacant possession following the death or permanent vacation of a Life Tenant from the property.
Managing the purchase of a Life Tenant’s Safeguarded Interests if requested.

Realising Your Investment

When the last Life Tenant passes away, moves into permanent long-term care, or voluntarily ends their Plan, you will need to instruct your solicitor at your cost to terminate the Lifetime Lease and obtain vacant possession.

Depending on the circumstances of your investment, you may also need to ensure that notice is served on any additional occupants living in the property under a waiver.

Your solicitor will require either a death certificate, deed of surrender, or signed confirmation from a medical professional confirming that each Life Tenant is incapable of returning to the property. This will satisfy the terms of the HFLP and will enable your solicitor to legally end the HFLP.

Once the restriction has been lifted on the property you will be able to realise the maximum value on your investment. You can either choose to let the property or sell the property on the open market at full vacant possession value.

Whilst the maximum return will be achieved at the end of the HFLP, Life Tenancies can be traded between investors before the asset reverts. Life Tenancies increase in value each year as a result of house price inflation and the natural aging of the Life Tenants during the investment term.

We work with many investors who acquire Life Tenancies, and we will be able to assist you to find a suitable buyer in the future should you wish to sell your investment.