Verbal agreement still valid when someone goes into care?

[Bailo82]

We had a verbal agreement with a relative to renovate her house and be paid for the materials and time once it sold. She has now been taken into a care home. Will we still be able to reclaim the money invested when the house sells?
Thanks in advance

 

[WaveJumper]

Why has she been taken into care is she able to look after her own affairs or has she given power of attorney to someone else

 

[paulears]

I believe the critical factor here is if the relative had lack of capacity when the contract was made. Power of attorney is quite different. Many elderly people, for age reasons do not sort this out in time, and continue to act as if they are perfectly fine. At some point the line gets crossed and going into a home is a common result - the question then is when did they lose the capacity to make decisions like this. It could be messy, and quite public. People can go into hospital and then during their stay have their lives suddenly changed when somebody initiates the capacity tests. If the person is physically compromised then I think this leave you able to take them to court, but don't think this may go your way easily. Can you prove the contract exists? If she's now confused and didn't tell anyone you could have a hard time proving it.

 

[eteb3]

I agree this may be messy: in a care home is neither here nor there, it will be a question of capacity at the time of the agreement as paulears says (and, of course, being able to prove the agreement).

If the relative still has capacity now to sign a memorandum of the agreement (long after the fact though it is), that will help: there's a recent leading case where HHJ appointed a care home resident trustee of a few million quid, so care home residency not a problem if capacity is unimpaired. Also worth noting that capacity is not a unitary or binary thing: it's capacity to do the particular thing in question that counts, not some general 'capacity as such' (there's no such thing).

What you're talking about though may be a contract (depends on your relationship bc, between family, the presumption of intention to create legal relations is often reversed) combined with an equitable charge on the house to the value of the contract; or alternatively, equity in the property to the value of your improvements.

Which of those obtains is one thorny legal question. Another is whether you can substantiate it. I imagine you may be foreseeing that you'll be up against the local authority, which also has a charge on the house for the care home fees? Messier still, because there are rules for the LA's benefit akin to the 'illegal preference' provisions in an insolvency.

Personally I'd say you need a solicitor. Though a written memorandum of the agreement may possibly suffice - especially if witnessed by someone who can attest to the capacity question.

 

[Jacob Evans]

yeah I agree with what's mentioned, it comes down to how you can prove the verbal agreement was made. My friend had run into similar issues and she couldn't sort it out on her own so she had to speak to the family law solicitor
such situations are always tricky, I always try to get similar matters down on paper just to be safe

 

[NickGrogan]

What do the rest of the family think?

If you can agree things informally it will be better for everyone, except the solicitors.