Deferred Payment Agreement (DPA)

If any of the following circumstances apply it will not be possible for us to secure a legal charge on your property unless you address them as detailed:

1. The property is unregistered:
   • you will need to contact a solicitor to assist with the registration with the Land Registry
      
2. The property is owned by more than one person:
   • all joint owners will need to agree to a legal charge being placed on the property
      
3. The property is jointly owned with a deceased spouse:
   • the ownership will need to be changed with the Land Registry. A solicitor will need to do this
   • you will have to provide a copy of the relevant death certificate
      
4. There is already a charge on the property:
   • the owner of all charges would need to agree to a further charge being placed on the property
      
5. The person doesn’t have mental capacity regarding their finances, and there is no appointed Deputy or Power of Attorney:
   • someone will need to arrange to be legally appointed to act for the person to be able to enter into the DPA
      
6. The property is a park home:
   • we can’t secure a charge against it, unless you own the land which the park home is on

It’s important that you start dealing with the issue as soon as possible and be aware there may be costs involved. 

There are advantages to having a Deferred Payment Agreement. 

You don't have to sell your house

You don’t have to sell your house whilst you are alive. If you choose a DPA we will discuss:

• the outcome of the financial assessment
• the cost of your care
• the equity in the property, following our valuation
• the costs to you in setting up and running the agreement

You may rent out your home

You may rent out your home and use part of the rental income to pay your care home fee. The advantages of renting out your property are:

• the DPA debt will be lower
• your property will be occupied
• your tenant will pay utilities and Council Tax
• we will only take account of 80% of your gross rental income in the financial assessment. This leaves you with 20% to do with as you wish

You can top-up your payments

If you choose a more expensive residential care home than we can afford, you can choose to add the difference to the deferred loan.  You can only do this if there is sufficient equity in the property.

Alternatively, a top-up for this extra amount would be required. The options are:

1. A first party top up. This is where you pay the extra amount in a separate agreement between the council and your care home.  This will come out of your own savings or deferred against the property. We will assess if this is a suitable option.
    
2. The extra cost placement could come from a third party. Often this is a close family member. We have a duty to assess whether this is sustainable by the person making the payment on your behalf.

Our charge for setting up the DPA is the same to you as the actual cost we incur.

There is also an annual administration charge which is calculated on a monthly basis and added  to the account.

We can add the set-up charge and the annual charge to your DPA but they will also incur interest.

These charges cover:

• legal costs
• land searches
• registry and valuation charges

If you wish to pay the charges separately, instead of including them in the loan, you will need to give us 14 days’ notice. Once this notice has taken effect, we will issue a separate invoice for the charges as they become due. If you do not pay the invoice within 28 days, the cost will automatically be added to the loan and interest will be charged from that date.

You can ask for a breakdown of the charges at any time, and we will give you notice of any changes.

For up-to-date details of the fees involved in a DPA please contact the Deferred Payment Team by email at deferredpayments@dorsetcouncil.gov.uk

To apply for a DPA, you must at least:

1. Have capital (excluding your house) of less than £23,250 (the upper capital limit).
    
2. Be assessed by a care practitioner as requiring permanent residential/nursing care in a registered care home and be entering one.
    
3. Be the sole owner of the property. If the property is held in joint or multiple names, the other owner(s) must agree to a legal charge on the property in favour of the council.
    
4. Ensure your property is registered with the Land Registry (if it isn’t, you must arrange for it to be registered at your own expense).
    
5. Have a responsible person willing and able to ensure maintenance is carried out on the property to retain its value. You are liable for these expenses.
    
6. Insure your property at your expense. You may be asked to provide evidence that the property is adequately insured every year.
    
7. Have mental capacity to agree to a DPA or have a legally appointed agent willing to agree to this.

Also:

• the property must have been your main residence before going into residential/nursing care
• there can be no other ‘beneficial interests’ on the property. For example, outstanding mortgages or equity release schemes, unless we have approved this

Deferred Payment Agreements Policy 2015