A right of residence is a legal entitlement allowing a person to live in a property without owning it.
It is most commonly created by a Will and is usually granted to a surviving spouse or partner, a family member (e.g. child, sibling), and occasionally a third party. It is usually granted for a person’s lifetime, but can be for a fixed period or last until a certain condition is met.
It can be an exclusive right or it can be shared right of residence. It is a personal right, not ownership and cannot generally be sold or transferred. It usually ends on death. It is an ‘acquisition’ for Capital Acquisition Tax purposes.
A common example of how a right of created is:
A farmer dies leaving a farm and house to 1 child, widow is granted a shared right of residence in the house. Child own the house/farm and lives in the house with the widow.
The most complications arise when the document creating the right does not set out clear terms of the extent of the right. Ideally, when it is created, it should set out conditions, to avoid disputes later, for example:
- Is there land/garden included?
- Who pays for the outgoings (utilities, insurance, LPT)?
- Who is responsible to repair and maintenance, internally, externally and the main structure of the building,
- To what standard should the repairs and maintenance be?
- Is it permitted to take in lodgers, whether paying or not?
- If the holder moves to a nursing home:
- does the right continue?
- can the property be rented?
If a property is subject to a Right of Residence, it will affect marketability. The property cannot usually be sold free of the right without consent, and this can delay or block transactions.
If you would like legal advice on Rights of Residence or any other legal matter, please contact us here info@mcgrathmullan.ie or call us here +353 (0) 1 873 5012
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- Wills and a Spouse’s Legal Right Share
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