Terms & Conditions

[swatts]

We have recently refused a claim where a clmt is in private rent, but still has a share in the former marital home (he left in Sept 2004).
The ppty is occupied by his wife, no deps, and she is not ‘incapacitated and not over 60 – so we can see no reason to disregard under para 4.
The value is approx £180k, no mortgage. The ppty is not on the market and they are not divorced – there appear to be lengthy negotiations involved!
The clmt has asked for a statement of reasons and says that he is going to appeal.
I need advice please on para 24, as he says that he initially came into our office in Sept 2004 and was told not to claim as his capital would exceed (allegedly!). Should we have considered para 24 at that time? What exactly does ‘estrangement’ mean in benefit terms?
Any help would be appreciated as this clmt is a tricky customer (and an ex staff member of many years ago!)

[jamcon]

Have a look at CH 0117 2005, where Commissioner Jacobs looks at estrangement.

[Anonymous]

I think you need to look at paras 4, 25 & 26 of Schedule 6 to the HBR 2006. The commentary in [i:2672182ee3]Findlay[/i:2672182ee3] is still very useful on these points. From the information you have given, it sounds as if the couple are certainly estranged and, if the wife is not yet willing to agree to a sale, you are going to have to disregard his share of the capital for the time being – he can’t actually get his hands on it until she agrees to a sale or he gets a Court order forcing a sale.

[petedavies]

Your claimant does have a realisable capital interest in the property – he could sell his interest now. If the property is worth £180K, is unencumbered and your claimant has a paper 50% interest I would guess that his share is worh between £20 & £30K as things stand at the moment.

If he is making reasonable efforts to dispose of it – this need not be limited to selling off his share as it stands now but could include attempting to reach a settlement – you can go ahead and disregard for as long as you think it is reasonable to do so under para 26.

As far as the advice is concerned (a) It was only that – if you had no claim you could not consider para 24 because you had nothing to base a decision on. (b) If an ex-member of staff, whilst he may not have had the in-depth knowledge he could certainly be expected to know the importance of a claim and I cannot see that he has anything to argue about.

[Anonymous]

But would you consider it reasonable to expect someone to sell a share worth £90k for £20-30k, when a little more negotiation might do the trick?

[petedavies]

The first step is to calculate the value of his capital (at the moment about £25K). Then decide whether reasonable efforts are being made to dispose of the premises. If yes then disregard the 25K under 26 for a “reasonable” period of time. This is a discretionary power so everything relavant should be considered when making the decision. The fact that taking action or negotiating may well yield a substantial increase in value in a short time-frame is, of course, a relevant factor but by no means the only one.

[Anonymous]

Yes, I would fully agree with Pete now

[chris harvey]

With matrimonial split cases like this with property involved I always thought the question to ask is “are they estranged or divorced?” If the answer is no, then there is an indefinite disregard under para 4 of Sch6. If the answer is yes (as this case appears to be) then this specific scenario is covered in para 25 which excepting cases where children are involved you can only disregard for 26 weeks with no power to extend this time. The 26 weeks runs from the date he left the property.
So I would say we have to count the property in his assessment. The valuation is another matter, but following the principles set in R v Palfrey the value of half a house is not 50% of £180K but substantially less than this figure.
I can’t see that you can apply para 26 and allow over 26 weeks if he is taking reasonable steps to effect a sale because the scenario of a former partner not estranged or divorced is covered quite specifically in para 25.
I am willing to be corrected though.

[petedavies]

Agreed re the 50% (Unless both parties have agreed a sale with vacant possession)

There are two reasons I think you can run with 26:

1) 25 relates to a dwelling whereas 26 relates to premises. They clearly therefore serve a different purpose.

2) 25 is a mandatory period to disregard follwing very specific circumstances, 26 is far more general in terms of time, the type of capital involved and the people it covers. I can see no way to argue that a person is excluded from 25 just because they, previously, fell within the provisions of 25. This would require a specific statement within the legislation.

[gary_t]

Palfrey is about tenants in common.  In such a situation, one tenant in common cannot force another tenant in common to sell his share.  Thus, with two tenants in common, the value of the asset of one of the tenants in common would be the market value of 50% of the benficial interest in a property (in which another person has the right not to be excluded from the property).  This is far lower than a half share of the beneficial interest in a whole property.  Who would want to buy such an interest – except perhaps a close firend or relative of the other tenant in common or the other tenant in common himself?   The very limited market for a 50% beneficial interest in a proprty means that the value is only nominal.  Joint tenancies are different, because of the possibility that one of them may be able to force sale of the whole.   

[esmith66]

I've just had a valuation done on the ex-marital home of the claimant, occupied by his ex. Valuation £100,000, value of claimant's share £0.00

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