Right of Residence

G

Greenstate

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I’ll try to keep this as clear, simple and concise as possible.
Father passed away recently has left house to all 5 siblings with the eldest sibling having been given exclusive rights of residence for his lifetime. I have a few questions.
1. I’m assuming the house cannot be sold till rights of residence has been waived. Y/N
2. There is an assumed value/benefit of 10% of the house value for waving this right to the eldest sibling, is this a correct assumption?

I ask these questions because the solicitor has indicated that if we were to sell the house without the rights of residence being waved which is something I believed you couldn’t do, the oldest sibling would be entitled to 80% of the sale value. Which sounds way off the mark and No matter what research I do I can’t find any information that confirms the solicitors point of view.

As a point of note this may be a case of miss understood information as this information has been passed through the executor of the Will who may have misunderstood.
 
I would say yes to both. We bought a house with a right of residence on it and our solicitor would not proceed with the sale until it was extinguished, as the cost would have fallen to us if it had not been removed before sale was complete. It was 3 siblings and two had to purchase it from the third before sale completed.

I have heard 10% several times down through the years for similar situations. Of course the eldest could negotiate any fee they like really but the 10% seems typical. If the oldest was a vulnerable person things might be different, and then perhaps they would need independent legal advice to ensure their rights were valued correctly.
 
Right of residence:. Rule of thumb (and only that) to discount by 10%. This is accepted by Revenue as an appropriate discount for Stamp Duty purposes. Unsurprisingly, the Revenue position is to allow the minimum discount. A higher percentage could be argued for in sale/release scenario.

Exclusive right of residence:. Not the same thing at all. Eldest sibling effectively owns the house for their lifetime.

On the facts outlined by OP, this sibling's rights should be valued as a life interest and the percentage then depends on age of the person. 80% of capital value may be entirely reasonable.
 
I hadn’t heard of the term “exclusive right of residence” before but there it is in the [broken link removed]. So confirm what is written in the will, but yes it is a life interest and could be valued very highly.

I would say that the oldest is best getting independent legal advice.

1. Do they want to live in the house or not?
2. Do they agree to the sale?
3. How much should they be paid to give up this right?
Then negotiate with the other siblings, the ball is very much in the oldest court. So it may come down to 5% now or 20% when the oldest dies.

.
 
Greenstate said:
with the eldest sibling having been given exclusive rights of residence for his lifetime
Click to expand...
The value depends on how long the eldest sibling is likely to live.

How old is the eldest sibling? Male or female? In good health?

If I was 18 and my 19-year-old sister had a lifetime right of residence in a house we had both been bequeathed then the notional value of my share would be next to nothing because a) my sister has a long time to live; b) her life expectancy would be more than mine.
 
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