To­tal ca­pac­ity

Matthew Cameron ex­plains what hap­pens in French law if a prop­erty owner is deemed too young, or no longer able, to look af­ter it prop­erly

French Property News - - Contents - Matthew Cameron is a part­ner and head of French le­gal ser­vices at Ash­tons Le­gal Solic­i­tors Tel: 01284 762331 ash­ton­sle­gal.co.uk

What if a home­owner is not deemed ca­pa­ble of look­ing af­ter a prop­erty?

Oc­ca­sion­ally we seem to go through pe­ri­ods at our law firm where lots of sim­i­lar en­quiries come in from po­ten­tial clients. Re­cently, we have re­ceived sev­eral calls from peo­ple con­cerned with how they may ad­min­is­ter as­sets in France of a fam­ily mem­ber who does not have ca­pac­ity to do it them­selves.

There are two main forms of in­ca­pac­ity that in­ter­est us: the first be­ing in re­la­tion to mi­nors (those aged un­der 18), and the sec­ond be­ing adults who have lost men­tal ca­pac­ity. We shall look at each in turn. Of course, the in­for­ma­tion be­low is gen­eral; de­tailed ad­vice should be sought on each case.

Mi­nor is­sue In the UK, mi­nors are not able to own prop­erty in their own name. Should a mi­nor in­herit a prop­erty in the UK, then it will be held on trust un­til he or she be­comes an adult. Bri­tish na­tion­als will be com­fort­able with this con­cept. How­ever, in France trusts are not recog­nised as prop­erty own­er­ship ve­hi­cles in the same way.

When it comes to France, a mi­nor is en­ti­tled to own a prop­erty, ei­ther in part or ab­so­lutely in his or her own name. This right ap­plies to Bri­tish na­tion­als (for ex­am­ple, chil­dren who have in­her­ited a hol­i­day home) whether they are res­i­dent in France or the UK. There is no need to have third party in­volve­ment for over­sight of the own­er­ship struc­ture. Nev­er­the­less, le­gal com­plex­i­ties arise should there be a need to sell be­fore any mi­nor chil­dren be­come adults, es­pe­cially where the child is a Bri­tish na­tional.

While chil­dren are en­ti­tled to own prop­erty in France, they can­not sell it, or take any steps to pass ti­tle to any other per­son. That power to trans­fer ti­tle from the mi­nor child rests with the court. If the chil­dren are Bri­tish na­tion­als, it will be for the UK court to grant au­thor­ity for a sale.

While the UK court does not have ju­ris­dic­tional au­thor­ity to make any or­ders in re­la­tion to trans­fer of land in France, it does have au­thor­ity to ad­min­is­ter the af­fairs of Bri­tish na­tional chil­dren. Thus even though the prop­erty is in France, it is right that a Bri­tish judge would be com­pe­tent to con­firm whether a Bri­tish child’s share of a prop­erty should be sold.

There is in fact a set of in­ter­na­tional reg­u­la­tions to which the UK has sub­scribed that cover ad­min­is­tra­tion of the in­ter­na­tional rights of mi­nors, and such mat­ters are cov­ered by this.

Con­flicts of in­ter­est The court’s over­rid­ing obli­ga­tion is to en­sure that the best in­ter­ests of the child are re­flected in any or­der that it may hand down in a judge­ment. In or­der for that to hap­pen, the court must be sat­is­fied that it is in­deed in the best in­ter­ests of the child for his or her in­ter­est in the prop­erty to be sold. In or­der to be cer­tain of that, the court will want to take ev­i­dence from the child, or at least from a per­son au­tho­rised to stand as a rep­re­sen­ta­tive.

A ‘lit­i­ga­tion friend’ – gen­er­ally another fam­ily mem­ber such as a grand­par­ent – has to con­firm that the child would be in agree­ment with the trans­ac­tion.

While it may ap­pear some­what bur­den­some for the court to re­quire that another per­son de­clare the trans­ac­tion should pro­ceed, it is done to pro­tect the in­ter­ests of the child. Let’s take as an ex­am­ple the rel­a­tively com­mon case where a per­son has died leav­ing an in­ter­est in the French home to a mi­nor, who then is the le­gal owner jointly with the sur­viv­ing par­ent. If that par­ent then wants to sell the prop­erty, per­haps to rein­vest else­where, that will re­quire ap­proval by the court on be­half of the child.

We can ex­pect that the court would be happy to ap­prove the sale if the par­ent wanted to re­turn to the UK, per­haps in­vest­ing some of the pro­ceeds of sale into another house. How­ever, the par­ent may have other plans for the money: the court might in­sist that the pro­por­tion due to the child would have to be in­vested on the child’s be­half, so that this fund would be pro­tected. The in­ter­ests of the child might not, on oc­ca­sion, match up ex­actly with those of the par­ent.

The re­sult of this, then, is that where a sale is to be sought by the sur­viv­ing par­ent, an ap­pli­ca­tion is made to the UK court, with par­ent and child hav­ing to seek sep­a­rate le­gal ad­vice be­fore ap­ply­ing to the court – the child’s ad­vice be­ing sought via his or her ‘lit­i­ga­tion friend’. The the­o­ret­i­cal risk of a con­flict of in­ter­ests aris­ing as be­tween par­ent and child obliges sep­a­rate rep­re­sen­ta­tion for each party.

Adult in­ca­pac­ity It is an un­for­tu­nate side ef­fect of the fact that we are tend­ing to en­joy longer lives that more of us are suf­fer­ing from prob­lems with men­tal ca­pac­ity as we age. The risk ex­ists, there­fore, that our own­er­ship of a prop­erty in France might be­come af­fected by ques­tions of ca­pac­ity.

Just as with mi­nors, there is a set of in­ter­na­tional rules that gov­erns how the in­ter­ests of an ‘in­ca­pable adult’ can be ad­min­is­tered. These rules, though, do not al­ways help.

Where a Bri­tish na­tional has com­pleted a Last­ing Power of At­tor­ney (LPA), it is pos­si­ble for this to al­low the trans­fer of that per­son’s real prop­erty in France. For clar­i­fi­ca­tion, an LPA is a doc­u­ment that can be com­pleted in the UK un­der which a per­son au­tho­rises trusted fam­ily

The in­ter­ests of the child might not, on oc­ca­sion, match up ex­actly with those of the par­ent

mem­bers, or named pro­fes­sion­als, to man­age their af­fairs in the fu­ture, should he or she lose men­tal ca­pac­ity.

How­ever, it is not sim­ply a case of pre­sent­ing the LPA to the no­taire. It will re­quire for­mal trans­la­tion into French – and be­ing a large doc­u­ment, this can be ex­pen­sive. In ad­di­tion, the trans­la­tion will in­evitably have to be le­galised for use in France; this le­gal­i­sa­tion has to be car­ried out by a spe­cial­ist solic­i­tor or a no­tary pub­lic. On top of that, the solic­i­tor is likely to have to pre­pare a dec­la­ra­tion (in French) as­sert­ing the va­lid­ity un­der UK law of the LPA, and its ef­fec­tive­ness in France.

Pow­er­less at­tor­ney? These steps will in­evitably de­mand some fur­ther in­volve­ment in the sale by the solic­i­tor in the UK. The French no­taire would un­der­stand­ably not be ex­pected to un­der­stand the va­lid­ity of the English doc­u­ment, so will need to rely on the Bri­tish solic­i­tor for suit­able re­as­sur­ance. That will ev­i­dently have an im­pact on the costs of the sale. How­ever, com­pared to the po­si­tion that would arise if the per­son had not com­pleted an LPA, the ex­tra costs pale into in­signif­i­cance.

If some­one loses ca­pac­ity with­out hav­ing com­pleted an LPA, then an ap­pli­ca­tion must be made sep­a­rately to the Court of Pro­tec­tion to es­tab­lish a ‘ tutelle’ or ‘deputy­ship’, un­der which a named per­son is em­pow­ered to take de­ci­sions and sign doc­u­ments on his or her be­half. The pro­ce­dure can be rather slow, and costly, in par­tic­u­lar where a spe­cific re­quest for au­thor­ity to sell a for­eign prop­erty is in­cluded.

While there are rel­a­tively few cases where a sale is sought on be­half of a per­son with­out ca­pac­ity, num­bers do ap­pear to be ris­ing. Un­for­tu­nately, the costs of such pro­cesses can be dis­pro­por­tion­ate, and the court pro­ce­dures time-con­sum­ing – such that keep­ing a po­ten­tial buyer in­ter­ested while an ap­pli­ca­tion is made can it­self be chal­leng­ing.

It is al­ways pru­dent, there­fore, to con­sider the risk of loss of ca­pac­ity, and its con­se­quences, at an early stage. You may want to con­sider writ­ing wills and, if your chil­dren are mi­nors, think about whether they should nec­es­sar­ily in­herit from you (there are lots of points to con­sider here). You may also want to think about com­plet­ing an LPA. The ad­vice of a spe­cial­ist solic­i­tor should be of great value.

Newspapers in English

Newspapers from UK

© PressReader. All rights reserved.