legal charge document

[michael007]

Can i ask for some advice please. I was along with my niece left the family home in my mothers will. Along with the deeds came a legal charge document. My mother took a loan from my sister for �8000 in 1990. to buy the ex-council house. No money was repaid to my sister during this time. After my mothers death, my sister is asking for the �8000, plus interest the same rate per cent per annum as is equal to the base rate from time to time of national westminster bank plc. So from 1990 to the present day shes looking for �23000, My concern is this, my sister said she had a verbal agreement with my late mother? My mother said nothing of this verbal agreemment during her final years while we were writting her Will. saying the charge need not be repaid during her life time and matters were left on the understanding that they would be repaid from the proceeds of sale of the house after her death. Should this agreement not have been in written form, i new nothing of this verbal agreement. So from the time of the legal charge loan to her death the interest was mounting up all in my sisters favour. Now i have a letter from her solicitor stating if this matter is not resolved satisfactorily they will have no alternative but to issue proceedings for a possession order in respect of the property. Do i have any rights in this case.

[Ethel]

Very unlikely. It is not unreasonable to expect base rate - she could have earned higher interest elsewhere.

See a solicitor if you are prepared to fight.

[michael007]

Thank you Ethel for your quick reply.
You say see a solicitor if iam prepared to fight,
I understand the legal charge document with the base rate fiqs etc, is a legal documention.
So anyone with a legal charge document can make up stories to earn extra money.
Are you a solicitor Ethel.
What would advise i do.

[Ethel]

I am not a solicitor, but can give very basic advice and never 'guess' .

The solicitor will ask why your sister is not inheriting the house with you and the niece. Is it because she is benefiting through the legal charge? Although she is only getting her own money back.

Your sister could easily state that her entitlement is not the �8k plus base rate, but a pro rata share in the house value.

For example, the house was bought for �16,000 with �8,000 of your sister's money. This would give her a 50% share.

The house is now valued at �200,000 - which would entitle your sister to �100,000.

My honest view given the limited facts is that you should pay your sister the �28,000.

But if you are sure this is not what your mother intended, get proper legal advice from a solicitor. You are probably aware that if it goes to court, any proceeds of the house and more could easily be swallowed up in legal fees.