Applications to the Court of Protection for Authority to Purchase and Sell Property
This means that should an instance arise in which a Deputy is required to sell or purchase property on behalf of P, they must ensure that they have authority to do so before proceeding.
Authority to purchase and sell property on behalf of P may be included in the Order appointing the Deputy. However, if it is not then the Deputy must seek the appropriate authority from the Court of Protection before acting on P’s behalf.
Circumstances in which a Deputy might be required to purchase property on behalf of P may arise where P has received settlement funds from a personal injury claim and wishes to use these funds to purchase a property. Similarly, there may be instances in which P’s current residence is unsuitable and alternative accommodation is required. Whatever the circumstances, it is important that the Deputy has the authority from the Court of Protection.
If the Order appointing the Deputy doesn’t include authority to purchase a property, then it will be necessary to apply to the Court for permission. An application to the Court of Protection to purchase property must explain the reasons why the Deputy requires such authority and should detail exactly how the purchase of a property will benefit P.
For example, it may be that P’s current accommodation is rented and is wholly unsuitable to meet P’s needs. Where possible, a Deputy should provide evidence of such unsuitability to the Court. In addition, the Deputy should set out the costs associated and satisfy the Court that a property purchase is affordable and in P’s best interests.
A suitable property does not need to be identified for P before the application is made. It would be prudent of the Deputy to submit an application to the Court of Protection as soon as it is established that a property will need to be purchased for P in the future. If authority has not been sought prior to a suitable property being identified for P, the Deputy runs the risk of P losing the property to another potential buyer. In these circumstances the Deputy can make an urgent application to the Court of Protection. However, it is at the Court’s discretion to determine whether the matter is urgent or not.
If the Court approves the application to purchase property, an Order will be issued confirming that the Deputy has authority to purchase property on behalf of P. Upon completion of the purchase, the Deputy must enter a restriction to HM Land Registry that no disposition of the registered estate made during P’s lifetime shall be completed by the registration without the authority of the Court of Protection.
The Deputy should also update the Office of the Public Guardian and provide copies of the title documents. Should P move into the property straightaway, all relevant parties will need to be notified of a change of address.
Where a Deputy has the authority to purchase property on P’s behalf, it should not be assumed that they also have the authority to sell property.
Where property is jointly owned, the owners are referred to as the trustees of that property.
In circumstances in which an individual who lacks capacity owns property and a Deputy is in place, an important consideration for the Deputy is how to deal with that property.
Section 20(3)(c) Mental Capacity Act 2005 restricts Deputies from carrying out trustee functions. This means that if property is jointly owned and one of the owners has lost capacity, the Deputy must make an application to the Court of Protection under S.36(9) Trustee Act 1925 to seek permission to appoint a trustee in place of the incapable person before the property can be sold.
This application to the Court should set out evidence of why the sale should go ahead and what will happen to P’s share of the proceeds of the sale. Only once a new trustee has been appointed in place of P can the sale go ahead.
The Court of Protection has recently issued guidance for Deputies who intend to sell P’s property when P is in a care home. Before agreeing to allow the sale of P’s property, the Court of Protection must be satisfied that the correct DOLS authorisation is in place. As such, copies of best interest decisions and standard authorisations from the Local Authority should form part of the Deputy’s application to the Court.
Can Property be Gifted?
Similar, to selling or purchasing property, a Deputy must ensure that they have authority from the Court of Protection before gifting a property owned by P.
If an application to the Court of Protection is necessary, a Deputy must provide capacity evidence which specifically relates to the decision in question. Here, that question would be, whether P has the requisite capacity to make a gift.
Alongside capacity evidence, the Deputy must provide evidence that the gift is:
- Proportionate to the size of P’s estate
It is also important that P is involved in the decision-making process where possible. P’s best interests must always be at the heart of any decision-making.
There are a number of circumstances where gifting property may not be suitable. For example, there may come a time where P’s Deputy is required to sell P’s property to ensure care fees can be met. If P’s property is gifted to another, P may later struggle to fund their care. In this scenario, should P then apply for funding from the Local Authority to help with their care fees, P could be deemed to have deprived themselves of capital or assets (the property), in which case they will not receive financial support from the Local Authority, leaving P in a very vulnerable financial position.
Substantial gifts should always be approached with caution and considered thoroughly before proceeding with an application to the Court of Protection for approval.
Decision making in relation to all of the above should always be recorded by the Deputy and submitted to the Office of the Public Guardian as part of their yearly Deputy Report.
If you would like further information or advice regarding the Court of Protection or assistance with an application, please do not hesitate to contact Caitlin Edwards on 0191 226 3749. Alternatively, you can contact any other member of our Court of Protection team on 0191 226 7878.