How is legal capacity assessed in the case of house purchase?
Legal capacity is an issue in the case of house purchase because if a lender enters into a contract with someone that they know lacks legal capacity then the contract is void. The way the law works however, the penalty for entering into a void contract falls on the party that has capacity rather than on the more vulnerable, disabled person. So, there is a risk to the lender that they will not have the mortgage repaid and they fear there is insufficient legal redress. In practice we have found that legal capacity is less of an issue than might be expected. However, where it is an issue then the lender might for example ask that the disabled purchaser meets with a solicitor representing the Society and the solicitor is then asked to judge whether or not the purchaser has sufficient capacity.
