More and more complaints are arising around equity release issues, particularly in the ongoing COVID-19 climate where finances and health concerns are drawing attention to equity release schemes.

If you believe you have an issue arising from an equity release, our professional negligence solicitors can assess your claim and advise you about how best to seek compensation.

Call us free on 0808 164 0808 or request a call back, and we will get in touch with you.

What is equity release?

Equity release schemes enable property owners to release wealth that is otherwise tied up in their home. This might, in theory, be to pay off previous mortgage endowment policies, to enjoy additional retirement funds or help family members financially.

Lifetime mortgages allow home owners to remain in their home and take a loan against its value in exchange for a lump sum, regular income, or a combination. This is not repayable until long term care or death. Home reversion plans are where a percentage of the property is sold, again for lump sum or income and again without moving out.

Equity release complaints

See below for a list of equity release complaint examples:

  • The interest rates – and in particular the effect of compound interest may be seen as unfair.
  • The circumstances in which the property would be sold after death, including the timing of the sale may result in complaints, particularly from your executors.
  • The impact of the equity release on an estate – both in terms of inheritance tax, but also in terms of the ultimate distribution of the estate. The beneficiaries may be expecting a far larger estate but the presence of an unknown equity release scheme may provide a shock.
  • The extent to which the equity release company would have any control over the assets – so, for example, what happens if they want to downsize – or go into care?
  • The availability of other sources of income (as an alternative to equity release). For example, your suitability may not have been properly evaluated. You or your loved ones may have been vulnerable and talked into equity release and it may not have been right for you – perhaps you had always planned to move or downsize instead.
  • Charges may be unnecessary or unfair. It may be that an early repayment charge could have been avoided under your existing mortgage – say for instance if moving into long term care and an exemption under the existing mortgage allows for this. Or, that jointly released equity was unfair with a spouse or partner having died or gone into care.

How should an equity release arrangement be agreed to avoid issues?

Your adviser should clearly explain the arrangement so you understand what is being agreed to. Eligibility for care should be considered (and thus whether early repayment charges might be avoided). They should also consider whether money could be obtained in a less expensive way.

The different types of equity release schemes should be explained in full along with the impact on an individual’s estate following their death.

What can I claim?

Each claim is different depending on the circumstances of the equity release, meaning that the loss suffered as a result will also be different.

That’s why it can be difficult to pinpoint exactly what you can claim. But, generally, you will be entitled to be put back into your pre-scheme position. This means that you and your estate (if matters come to light after you have died) may be able to reclaim some of the money you lost in the process of taking out the equity release.

What time limits are in place for equity release claims?

Generally a claim for professional negligence must be issued at Court within six years of the negligent act or omission, or within three years of the date of knowledge subject to a 15 year longstop, if damage is suffered at the point of the negligent act (ie. the equity release). If you are unsure on this please contact us today to discuss your own individual circumstances. Call us free on 0808 164 0808.

You should also lodge your complaint with your adviser and then with the Financial Ombudsman Service, or the Financial Services Compensation Scheme within six years, or within three years from when you first knew about it.

How is my equity release claim funded?

Our professional negligence lawyers are happy to discuss fee options and advise clients under a wide range of fee structures including working under:

  • An existing legal expenses insurance;
  • A fixed fee;
  • Traditional hourly rate retainers;
  • “No Win, No Fee” agreements.

Contact our professional negligence solicitors

If you would like to talk to us about a potential equity release compensation claim, please get in touch. You can call us free on 0808 164 0808, or alternatively you can request a call back and we will call you.

Disclaimer:

In general you have six years from the date of negligent act or omission to make a professional negligence compensation claim. However, there are some exceptions to this rule for instance you may bring a claim within 3 years of the date you could be said to have become reasonably aware of the alleged negligence. This time limit is referred to a limitation period. It is important to speak to a legal team as early as possible to avoid any issues with limitation dates.