Moore Blatch solicitors is advising brokers that their buy-to-let clients who intend using their property to fund some, or all, of their retirement should have a Property and Financial Lasting Power of Attorney (LPA) created before they reach retirement age, or their clients must have explicitly indicated that they do not want one.
The law firm said that regardless of whether a landlord uses an agent to manage his/her portfolio and does not need to review their finances regularly, he/she will nonetheless need to deal with their properties and finances from time to time – whether it’s just instructing a plumber or agreeing a new lease for tenants.
Moore Blatch advises that a significant percentage of landlords will become unable to manage some, or all, of their financial affairs at some point during their retirement due to physical ill-health or a lack of mental capacity. The problem is that no one knows if it will be them that requires the assistance or not, it says.
LPAs allow a person to appoint a third party (attorney) to make decisions about their health & welfare as well as finance & property matters, if they no longer have the capacity to do so themselves.
Moore Blatch also advises that the take up of LPAs is woefully low. Current data shows that around one million LPAs have been taken out in England and Wales since 2012, which is a tiny number considering that there are around 1.5 million people aged over 85 and around 5 million aged over 75.
According to Moore Blatch, there are a number of reasons why the take up of LPAs remains low in the general public, including: a general lack of awareness of LPAs, a lack of willingness to accept that one might need an LPA, and the perceived and actual complexity of putting one in place.
Fiona Heald, head of the Court of Protection team at Moore Blatch solicitors, said: “While we would argue that most people should have the security of a Lasting Power of Attorney in place, we would expect virtually everyone who has chosen to manage their retirement finances personally to have one. Without an LPA a third party would not legally be allowed to instruct an adviser on any changes to a property portfolio no matter how closely related.
“We would usually recommend that the LPA is drafted by a solicitor as there can be very serious consequences should an LPA be completed erroneously and the forms can appear to be deceptively simple. In most cases errors are not discovered until it is too late.”