Dated 2015
Deferred Payment Agreement
between
CUMBRIA COUNTY COUNCIL
and
[INSERT NAME OF ADULT RECIPIENT OF CARE]
[and]
[Co-owner (if applicable)]
Once signed, failure to comply with the terms of this Agreement may result in your home being repossessed and sold.
You are strongly advised to obtain independent legal and financial advice
Cumbria County Council
The Courts
Carlisle
File Ref: [INSERT FILE REF HERE]
THIS DEED is dated 20
PARTIES
1. CUMBRIA COUNTY COUNCIL (“the Local Authority”) is whose principal office is The Courts English Street Carlisle CA3 8NA; and
2. [INSERT NAME OF ADULT RECIPIENT] (“the Borrower”) of [Insert address]. [;and]
3. [INSERT NAME OF CO-OWNER] (“the Co-Owner”) of [Insert address].
BACKGROUND
(A) The Local Authority has agreed under the terms of this Agreement and the accompanying Schedules to provide the Borrower with a facility to defer Care Charges.
(B) The Borrower owns [together with the Co-Owner] the Property.
(C) This deed sets out the agreement between the parties under which the Care Charges will be deferred and the Loan will accrue.
AGREED TERMS
1. Definitions and Interpretation
1.1 Definitions:
Accommodation: the care home or supported living accommodation identified in Schedule 4, or such other care home or supported living accommodation as the Borrower may relocate to, with the consent of the Authority, during the Term;
Act the Care Act 2014 as amended from time to time and all subordinate regulations thereunder, including the Regulations, as amended from time to time
Agreement: the terms and conditions set out in this document and the Schedules hereto;
Care and Support: the package of care provided to the Borrower from time to time and funded (in whole or part) by the Loan, the current package as at the date of this Agreement is set out in Schedule 4
Care Charges: those charges for Care and Support, as may be amended from time to time;
Care Provider the entity providing care and operating the Accommodation
Commencement Date date set out in Schedule 4 being more than 14 days after the date of this Agreement
Contribution The amount which the Local Authority requires the Borrower to pay as a
contribution towards each weekly Care Charge, having carried out a full financial assessment of the Borrower, being the amount by which the assessed weekly income exceeds the Income Limit or other sources identified as meeting the assessment criteria such as savings or other assets, contributions from a third party or a financial product designed to pay for long-term care. The initial Contribution is set out in Schedule 4.
Costs: the Local Authority’s reasonable administrative costs incurred in respect of this Agreement including, but not limited to, costs involved in:
· ascertaining the value of the Property (initially and subsequently when appropriate)
· registration of the Legal Charge,
· perfection of the Legal Charge,
· discharging the Legal Charge and
· Costs incurred for the purpose of ensuring compliance with the Agreement.
as set out in Schedule 1;
Debt: the balance from time to time of the Loan which has not yet been repaid, together with any Interest and Costs not yet paid;
Default: any breach of this Agreement;
Deferred Charge: the amount of the ‘Loan’ that has accrued (see definition of Loan below)’
Eligibility Criteria: the eligibility criteria from time to time as currently set out in section 13 of the Act.
Income: means the Borrower’s income as calculated in accordance with the Act;
Income Limit: the weekly income limit as determined by the Act from time to time, the current limit is set out in Schedule 4
Interest: interest to be charged on the Loan and Costs in accordance with this Agreement at the daily equivalent of the Rate of Interest,;
Legal Charge: A first fixed legal charge over the Property to secure the Debt.
Lending Limit: the limit on the amount that the Local Authority will lend to the Borrower under this Agreement being the lower of:
1) 90% of the Value of the Property less:
(a) the total amount of any indebtedness secured on the Property, or those assets, which security has priority over the Local Authority’s security, and
(b) any sum to be disregarded in accordance with the Act (the current amount is set out in the Schedule 4);
or
(2) The Maximum Loan
Loan: the total amount, at any time, which has been lent under this Agreement to pay Care Charges or, where the local authority is the care provider, the total amount of Care Charges which have been deferred, and the words “lend”, “lending” and “lent” are used in this Agreement to describe the act of deferring a Care Charge or Care Charges payable to the Local Authority together with.;
Maximum Loan the maximum amount which may be loaned to the Borrower in accordance with the Act (the Current amount as at the date of this Agreement is set out at Schedule 4)
Property: the property set out in Schedule 4
Rate of Interest: 0.15% above the market gilt rate as determined in accordance with section 9 of the Regulations (the current rate of interest at the date of this agreement is set out at Schedule 4);
Reference: the Reference set out in Schedule 4
Regulations: The Care and Support (Deferred Payment) Regulations 2014 as amended from time to time
Rent: all amounts payable to or for the benefit of the Borrower by way of rent, licence fee, ground rent, service charge and rent charge in respect of any part of the Property and other monies payable to or for the benefit of the Borrower
Term the period from the date of this Agreement until the Debt is repaid in full
Value the market value of the Property as determined by the Council, its employees, agents or sub-contractors via a Valuation
Valuation: any valuation relating to the Property commissioned or undertaken by the Local Authority
1.2 Interpretation
1.2.1 A reference to a statute or statutory provision shall include all amendments, revocations, re-enactments and subordinate legislation made from time to time under that statute or statutory provision.
1.2.2 Unless the context otherwise requires, a reference to one gender shall include a reference to the other genders.
1.2.3 Unless the context otherwise requires, words in the singular shall include the plural and in the plural shall include the singular.
1.2.4 Unless the context otherwise requires, references to clauses and Schedules are to the clauses and Schedules of this Agreement and references to paragraphs are to paragraphs of the relevant Schedule.
1.2.5 Clause, Schedule and paragraph headings shall not affect the interpretation of this Agreement.
1.2.6 A reference in this Agreement to the Legal Charge or mortgage of, or over, the Property includes:
1.2.6.1 all buildings and fixtures and fittings which are situated on, or form part of, the Property at any time;
1.2.6.2 the proceeds of sale of any part of the Property and any other monies paid or payable in respect of or in connection with the Property;
1.2.6.3 the benefit of any covenants for title given, or entered into, by any predecessor in title of the Borrower in respect of the Property and any monies paid or payable in respect of those covenants; and
1.2.6.4 all rights under any licence, agreement for sale or agreement for lease in respect of the Property.
1.2.7 The Schedules form part of this Agreement and shall have effect as if set out in full in the body of this Agreement.
2. The Loan
2.1 The Local Authority agrees, subject to:
2.1.1 the Lending Limit; and
2.1.2 limits related to Income set out in this Agreement; and
2.1.3 the Borrower continuing to meet the Eligibility Criteria; and
2.1.4 the Borrower paying to the Local Authority the weekly Contribution set out in Schedule 2
to lend to the Borrower a sum equal to the Care Charges and Costs (as agreed) accruing from time to time during the Term for the exclusive use of paying the Care Charges and Costs.
2.2 The Borrower undertakes to pay the Care Charges and Costs during the Term when they fall due.
2.3 Where the Lending Limit or any other limit on the Loan or Debt is reached the Local Authority shall not be obliged to make any further advances to the Borrower until such time as the relevant limit is raised.
3. Local Authority Obligations
3.1 The Local Authority shall pay the weekly Care Charge directly to the Care Provider at the Accommodation.
3.2 Where any variation to the Loan Payments or the frequency of the Loan Payments is, in the Local Authority’s view, required the Local Authority shall give the Borrower not less than 14 days’ notice of the variation.
3.3 The Local Authority, upon giving the Borrower at least 30 days’ written notice, may, at any time, require the Borrower to repay any amount forming part of the Loan for Care Charges in respect of any week where the Borrower’s income exceeded the Income Limit in that week.
3.4 Where the Borrowers income increases during the Term so as to exceed, or further exceed, the Income Limit, the Local Authority may by service of 30 days’ notice increase the Contribution by an amount proportional with the Borrowers increase in income.
3.5 The Local Authority will not lend any amount or further amount under this Agreement where:
3.5.1 the Borrower is no longer receiving Care and Support in the Accommodation;
3.5.2 in the reasonable view of the Local Authority the Borrower’s needs should no longer be met by the provision of care and support in the Accommodation;
3.5.3 the Borrower or the Local Authority can no longer adequately insure the Property against all usual risks, unless there are reasonable grounds for concluding that the site value of the Property, disregarding any building on the property, is adequate security for the Debt, together with such further lending as is to be provided.
3.5.4 the Borrower’s financial resources, in terms of capital and as calculated for the purposes of the financial assessment carried out under section 17 of the Act, are not more than the sum specified in the Regulations (the current amount at the date of this Agreement is as set out in the Schedule 4 as “The current Lending Limit amount to be disregarded”), and since the date of this Agreement the Property has, with consent of the Local Authority, become occupied by the Borrower’s partner, or child who is under 18, or by another member of the Borrower’s family who is aged over 60 or who is incapacitated and for the purposes of assessing the Borrower’s financial resources in terms of capital the Local Authority has decided to disregard the value of the Property.
3.6 The Local Authority will give the Borrower at least 30 days’ written notice of the date on which the Lending Limit will be reached unless it is not reasonably practicable to do so because, for example, the Lending Limit is reached by reason of a fall in the value of the Property.
4. Borrower Obligations
4.1 The Borrower agrees to pay to the Local Authority the weekly Contribution as amended from time to time in accordance with the Act.
4.2 If there is any change in the frequency of the Care Charges or any change in the amount of the charges which the Care Provider is charging for care, the Borrower must inform the Local Authority as soon as reasonably practicable.
4.3 The Borrower warrants to the Local Authority that it has:
4.3.1 Received adequate information on options for paying Care Charges, prior to the date of this Agreement;
4.3.2 Received adequate independent legal and financial advice on the options at 4.3.1 above and on the consequences of entering into this Agreement.
5. Beneficial Interest
The Borrower confirms that there is no other beneficial interest (whether by way of mortgage or third party interest or otherwise) affecting the Property which will require the consent of any other third party to the creation of the Legal Charge.
6. General Conditions of the Loan
6.1 If the Borrower moves to new Accommodation, the Care Charges payable in respect of the new Accommodation (or if less that part of those new care charges which are equal to the existing Care Charges) will be substituted as the Care Charges if they meet the definition of the Care Charges.
6.2 Should the new accommodation not meet that description given of the Care Charges the new accommodation will be substituted as the Accommodation if the Local Authority is either required under the Act to agree to lend in respect of those care charges or permitted to do so under the Act and in its sole discretion elects to do so.
6.3 The frequency and date of payment of the Care Charges will be amended where at least fourteen days’ notice of those changes have been given to the Local Authority.
7. Interest
7.
7.1 Interest will accrue daily on the Loan and any unpaid Costs at the daily equivalent Rate of Interest and will be charged on a monthly basis.
7.2 Subject to clause 7.3, the Borrower will be liable to pay the Local Authority Interest monthly in arrears in accordance with Schedule 2
7.3 The Borrower may give the Local Authority at least 14 days’ written notice that they wish the Interest to be added to the Debt and deferred rather than paying it as it becomes due. The Borrower may reinstate their wish to pay interest to the Local Authority as it becomes due at any time by giving the local authority at least 14 days’ written notice of the request.
7.4 The Local Authority shall vary the Rate of Interest (to increase or reduce it) no more than twice per year of the Term and shall give the Borrower at least 14 days’ written notice if the Rate of Interest is to be increased, provided that the Rate of Interest may never exceed the maximum rate which the Local Authority is permitted to charge in accordance with the Act.
7.5 In the event that the Local Authority pursues an unpaid debt under this Agreement through the Courts, a higher rate of interest shall be payable in accordance with the Act and under the provisions of section 69 of the County Courts Act 1984.