How Is A Life Tenancy Created?
There are several ways in which a life tenancy can be created. A spouse could set up a life tenancy for their partner upon their death. They could stipulate i their will that they want the surviving partner to stay in the property without paying any rent until they die. The surviving tenant would remain in the property and the house could be sold with them in situ. Of course this arrangement would have a serious affect on the value of the property depending on the age of the tenant. The house would still form part of the estate of the original homeowner and could still be sold as a life tenancy should the executors decide that is what thy wish to do.
No Rent Is Paid By The Life Tenant
The basic idea is that a partner can remain in the property without having to worry about paying rent or a mortgage. The beneficiaries will still gain an asset but it will not have the same value as a vacant house. Of course most of these arrangements are put in place beforehand and is a common arrangement. It is something that is normally put in place so that both the surviving partner and the beneficiaries are able to share the estate. Other life tenancies are set up through trusts for tax purposes but this is not something that we come across very often.
No Succession Rights
It is not possible to pass the tenancy onto anybody else so upon the death of the life tenant the property will revert to the landlord. These are very different from regulated tenancies and there are no rights of succession. Most landlords will prefer to buy a property where the tenant is older as they are likely to gain vacant possession sooner rather than later. The value of the property will increase significantly upon the death of the life tenant.