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What to do about the house?

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  • What to do about the house?

    I am planning to separate from my common-law husband. Our house is in both names, BUT my parents live in the basement, and they gave us a large portion of the down payment on the house as their 'rent'.
    Obviously, when we separate, it would make more sense for me to stay in the house, since it's my parents living there, but what do I need to do for him? Do I need to pay him half of what the house is worth? Half of what WE put on the house? or what?
    Also, since I can't afford to pay him anything at all, would I need to remortgage the house in order to pay him?
    I'm sorry for my ignorance, but this is all completely new to me.
    Any help is appreciated!!

  • #2
    You would have to get the house appraised by a certified appraiser and then deduct the mortgage remaining and provide him 1/2 of the remaining equity in the house.

    So lets say house is appraised at $400k. Mortgage remaining is $150k. You would owe him $125k.

    If you cannot afford to repay him, you would have to:

    a) remortgage the house to give him his percentage; or
    b) sell the house and split the equity proportionally.

    You may have had an argument that the monies lent by your were a gift to you and should be considered matrimonial, except for the fact that the monies went into the matromonial home, thus co-mingling the funds, and on top of that the fact that you both were repaying your parents by letting them live rent free. Effectively they gave you a lump sum rent cheque good for X amount of months.

    So you will have to buy him out or sell unless he will agree to a lesser amount.


    • #3
      I thought for common law there was no 'matrimonial home'?


      • #4
        Originally posted by blinkandimgone View Post
        I thought for common law there was no 'matrimonial home'?
        They bought and put it in both their names. It would be different if it was a pre-existing home owned by one party.

        Notwithstanding that, she said it was for "rent". Thus her parents gave BOTH of them the money, as they are the joint owners of the house and therefore joint landlords, as a lump sum rent cheque. She has no individual claim to this as the payment for rent would be to both her and her ex as joint owners.


        • #5
          Thanks HammerDad!
          That helps a lot!
          And yes, you are right, we purchased the home together after we were already considered common-law, and it is in both of our names. And what you said about my parents' rent being essentially for both of us, that makes sense.



          • #6
            Common law with both on the deed - is like marriage. commonlaw one person on the deed and a long term union.....I believe there is a call to come to terms which may very well mimick a 50/50 divison. My friend who just finished a short term commonlaw had no worries to retain the home he owned and paid all the expenses towards. Details make the difference.

            But to answer your question - there will be no favours to you or your parents who live in the basement. The house will be yours, his or sold for whatever value that the apprasser gave (that you both agree to - than can be several apprasials with different numbers). BUt in the end it is fair market value and if you want it - yo will need to pay him up front for it.

            Nothing says you can't come up with an agreeable way to do this as long as both agree and the paperwork protects the interests of both of you equally. This could be he becomes your banker as you pay him a monthly amount? And yes the latter would be no different than dealing with a bank because you should be paying interest on top of principle - this is a business transaction by this point - point is negotiate!

            DO a hunt on the parents money (not a regular rent type payment from your parents but a lump sum gift that they expressly put some conditions to the gift so that only you receive the benefit) so check on CALLII?? (I think it may come up in the Family Law Act directly as well) I seem to remember a clause where if a parent gave child cash expressly for the benifit of their child and not a gift to the two of you - but if the money was given directly to you to paydown a mortgage and the spouse was specifically excluded from the benefit to which this money represented -- Then i believe the parents money can be removed from the equation and it stays with the child it was given to.... EVEN if was put into the mortgage. No proof, just a memory as I read finding things for my circumstance.
            Last edited by ddol1; 11-22-2011, 05:04 PM.


            • #7
              Hi ddol1
              I am in a similar situation where I borrowed 150k as down payment for our house from my family. Now, she wants half the house (we are both on title) and she wants half of the 150 I borrowed as well claiming it was gifted to both of us which it was not. We bought the house 11 years ago and I have been carrying all expenses ever since. She has been living away from the home since Oct of 2010. We have been common law since 1988, with 2 kids, 15 and 13 that live with me. She has not contributed to the family expenses except for very short working periods mostly part time.

              I could not find anything on Canlii or anywhere else. Is there any advice you or anyone else give me? I cannot afford to to take this to trial, or even a afford a lawyer any more. I already spent 16k in legals and am no further ahead.


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