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Subject: "Support for Mortgage Interest- joint owners aren't a couple" First topic | Last topic
murphs
                              

Senior Financial Inclusion Officer, Rethink. London
Member since
09th Sep 2009

Support for Mortgage Interest- joint owners aren't a couple
Fri 26-Mar-10 12:10 PM

Hello,

I've had a query from someone who is joint owner of a property with his brother (joint owners not tenants in common).

He is in the process of making a claim for ESA. If he receives IR(ESA) and after 13weeks becomes entitled to SMI, how does this work in practice, considering his brother is working?

CPAG indicates that he could receive 'his share' of the housing costs, but is the monthly mortgage payment just split 50/50? I'm a bit confused as surely with a joint mortgage each party is jointly and severally liable for the payment and if one party stops paying the other is expected to make it up otherwise risk arrears accruing...........

Thanks

  

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ariadne2
                              

Welfare lawyer and social policy collator, Basingstoke CAB
Member since
13th Mar 2007

RE: Support for Mortgage Interest- joint owners aren't a couple
Fri 26-Mar-10 05:51 PM

It's the same even if they are tenants in common, because in law they own the property jointly on trust for themselves jointly (the latter being the beneficial interests). Only a person who owns a legal estate in land can create a mortgage and it is not possible for more than one person to hold the legal estate as tenants in common, only the beneficial interest.

In an ordinary trust, where the trustees and beneficiaries are not the same people, it would be the trustees who had the power to mortgage the property and they would be jointly and severally liable for the payments even though they have no beneficial interest in the property at all. It's just one of those things that joint ownership of land always takes the form of a trust.

In case you wre wondering, there is not difference between a beneficial interst and an equitable interest. They mean exactly the same thing.

Para 7(5) of Sch 6 of the ESA Regs says "Where responsibility for expenditure which relates to housing costs met under this schedule is shared, the amounts applicable are to be calculated by reference to the appropriate proportion of that expenditure for which the claimant is responsible". In R(IS) 19/95 it was held that this did not mean "legally liable" but the amount that the claimant actually (normally) paid.

  

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Top Other benefit issues topic #4393First topic | Last topic