How Can I Recover Down Payment on House?

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lorlaman

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I am in a 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 claiming it was gifted to both of us from my family which it was not. I have a loan agreement from my brother for 100k, and the 50k was loaned from my parents and is deducted from my inheritance if not paid. 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 daughters, 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. I cannot afford to take this to trial, or even a afford a lawyer any more and I will need to self represent. I already spent 16k in legals and am no further ahead. I am now completely out of money.
 
good thing you got the loan agreement with your brother. I used part of my early inheritence from my mom as part of my down payment and since there was no loan agreement signed i was sol for that.

I hope you have her paying CS for the kids.
 
I can't give you the actual CANLII case but I have read one where the gift froom your parents was ruled as a gift to you not your wife and as such would then be deductable from the equalization. It has to do with the issue of a "pre" death inheritance as well - but I am not sure if this case also had some form of documentation that also bequeathed the money to thier son and not to be shared in any form with any other person including thier spouse. That is a pretty specific clause I do remember reading. But I can't say if any applied to a circumstance such as yours - I can only suggest you adjust your thinking when you create your CANLII searches to get the ruling that could help your case.

I have nothing specific for you but if anything I put down rings true and you can adjust your CANLII search to find that elusive ruling to support your claim. Remember though there is the issue of the Matramonial home clause which basically says 50/50 division with your spouse regardless of who, how, or when the money was put into the house it is divided equally. Whatever you find will have to include why this should not be applied in your case.

Last is - if you are out of money but have the reasonable ruling to support your claims - any part of it - you can self represent and this is the place to get the help you need for that.
 
Both your names are on the deed, so she'll get a stake in the home. However, with CL, it won't be 50/50, if you can prove that your contribution was greater than hers. Based on what you say, you can clearly show that 150K of the equity in your home is debt in your name. She can claim it as a gift to both of you, but you retort with the written documentation showing it as debt. Home equity is house value minus any debt towards the home. This means that the 150K is not home equity - it's debt that you still owe. Does she want half of that? I doubt it.

As for the amount of real equity in the home, I'm assuming that she wants half. Well, with CL, she will only get what she can prove in terms of her contribution. Here's the kicker: While she may have not contributed significantly thru direct financial means, she can claim unjust enrichment and increase her share of your home. Unjust enrichment is when one party is unjustly enriched at the expense of another, and an obligation to make restitution arises. You stated that you have two kids together and she hardly worked; this means she was essentially a stay-at-home mom. Her homemaker contribution can be grounds for unjust enrichment. Her homemaker status can also put you on the hook for SS.
 
Ok now I am embarassed - truely isn't one of my brighter moments:D
Fitting because it is also not one of my better days, or weeks as I sit here! Tomorrow comes soon!

Seriously - I almost got to my first smile today..... thanks for the help!
 
Teenwolf said:
Both your names are on the deed, so she'll get a stake in the home. However, with CL, it won't be 50/50, if you can prove that your contribution was greater than hers.
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I paid all the expenses and did all the renovations and repairs myself. We had a joint bank account but only I contributed to it.

Teenwolf said:
Based on what you say, you can clearly show that 150K of the equity in your home is debt in your name. She can claim it as a gift to both of you, but you retort with the written documentation showing it as debt. Home equity is house value minus any debt towards the home. This means that the 150K is not home equity - it's debt that you still owe. Does she want half of that? I doubt it.
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She doesn't want the debt, she wants 1/2 of the 150 claiming it was a gift.

Teenwolf said:
As for the amount of real equity in the home, I'm assuming that she wants half. Well, with CL, she will only get what she can prove in terms of her contribution.
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The only equity in the home is the 150 that is debt. We paid 357k for the house and took on a 200k mortgage. We then refinanced to 275 mortgage and then to 330k for different reasons. All along, the debt load was on me alone. The house is valued at 500k, removing the mortgage and the 5% RE fees, there is nothing left but the 150 loan from my family. If the house sells, she wants half of the 150.

Teenwolf said:
Here's the kicker: While she may have not contributed significantly thru direct financial means, she can claim unjust enrichment and increase her share of your home. Unjust enrichment is when one party is unjustly enriched at the expense of another, and an obligation to make restitution arises.
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In order for this to happen, I would need to show that I have gained at her expense. I have not. Other than the house, there is little else we have.


Teenwolf said:
You stated that you have two kids together and she hardly worked; this means she was essentially a stay-at-home mom. Her homemaker contribution can be grounds for unjust enrichment. Her homemaker status can also put you on the hook for SS.
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I have a temp order to pay her 1500 monthly, she pays no child support although the kids live with me and she barely sees them. We still have not had settlement and the OCL was also involved. I look to this section of the FLA for some more help, but I'm not sure how it may apply:

Obligation of spouses for support
30. Every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so. R.S.O. 1990, c. F.3, s. 30; 1999, c. 6, s. 25 (3); 2005, c. 5, s. 27 (7).

Thanks for your comments.
 
I did a little more research and it appears that she will get 50% of the equity in the home that you jointly own. Check out the Partition Act for details. However, there is no equity in the home, so there's nothing to split. She can argue that there is 150K (as a gift) equity in the home, but you can argue this with your supporting documentation. If you provide proof of the debt towards the house, then a judge will subtract that debt from the value of the home. She can argue it, but what evidence does she have that would indicate the 150K was a gift?

Fair enough about you needing to show that you gained at her expense. Actually, the onus is on the party arguing unjust enrichment, to show the deprivation on her part and the subsequent gain on your part.

Thankfully, I've never been involved in SS and it seems complicated. Sure, every spouse has an obligation to provide support for himself or herself and for the other spouse, in accordance with need, to the extent that he or she is capable of doing so; however, other stuff is taken into consideration:

(a) the division of function in their relationship;


(b) the express or tacit agreement of the spouses or common-law partners that one will maintain the other;

(c) the terms of a marriage contract or separation agreement between the spouses or common-law partners;

(d) custodial arrangements made with respect to the children of the relationship;

(e) the obligations of each spouse or common-law partner towards any children;


(f) the physical or mental disability of either spouse or common-law partner;

(g) the inability of a spouse or common-law partner to obtain gainful employment;

(h) the contribution of a spouse or common-law partner to the education or career potential of the other;

(i) the reasonable needs of the spouse or common-law partner with a right to maintenance;

(j) the reasonable needs of the spouse or common-law partner obliged to pay maintenance;

(k) the separate property of each spouse or common-law partner;

(l) the ability to pay of the spouse or common-law partner who is obliged to pay maintenance having regard to that spouse's or common-law partner's obligation to pay child maintenance in accordance with the Guidelines; and

(m) the ability of the spouse or common-law partner with the right to maintenance to contribute to his own maintenance.

I found a recent case that covers a lot of your situation. They were common law, jointly owned home, had two kids and mom hardly worked. They had a cohab agreement, but the judge detailed his decision in terms of the cohab and without.

CanLII - 2011 NSSC 34 (CanLII)

You're already paying her $1,500/month, but you have the kids and she's not paying any CS. If she's not working, then she needs to step up to the plate, get a job and start financially contributing to her kids. If I were you, I would be pressing that issue; you're not the only one who has financial obligations from the partnership.
 
Thanks Teenwolf, I have been going through cases myself but did not come across this one. It really helps me though.
I am not arguing that she not get half the house, but, I do not walk away with half either and am stuck with the debt.
I'm not sure how I can take this to trial though. Right now, I need to self represent since I cannot afford the legals.
 
I hear ya! The thought of self rep in court is stressful and daunting. As long as you can prove the 150K is debt, I believe her application for 75K will be dismissed.

You can counter her application with a motion for primary custody of the kids and CS. You already have them, which I believe will go in your favor. I don't know your circumstances, but I would also argue the SS amount. If you get primary custody of the kids, you'll be in a situation whereby you're the SS payor and the CS payee. Any CS received would at least offset the SS owed.
 
Hi SOTS
There is a agreement between my brother and I which provided the loan to be interest free. The principal is demanded back.

There was no loan agreement written with my parents only verbal. My dad passed away and cannot speak for himself, however, my mother is still with us and able to testify. Further, the loan made to me is clearly identified in my parent's will written 6 years ago and deducts the loan amount from the inheritance I am to receive since repayment was not made.
 
Okay then...you have documentation for both. You have a loan agreement with your brother for 100K and 50K is tied into your inheritance, which is written in a will. Show her copies of these docs. If she still persists that it's a gift, then you'll end up in court. I believe the docs will dismiss her application.
 
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lorlaman - hate to throw a monkey wrench in but..... you have what might be termed a loan from your parents - documented in the will and DEDUCTED if not repaid. There may be an easy case for someone to get that loan redefined as actually an early inheritance which would then not be a loan.

now that it is called an inheritance - you chose to put it into the matramonial home. Once you did that your ex then again has the right to demand 50% of the equity in the home as per standard family law. You need to make real sure you close that obvious loophole that any bad lawyer would be able to create in thier sleep(in other words it is too easy to get this done and you are out of 75K and you will not have much of a defense - non actually)
 
ddol1 said:
now that it is called an inheritance - you chose to put it into the matramonial home. Once you did that your ex then again has the right to demand 50% of the equity in the home as per standard family law. You need to make real sure you close that obvious loophole that any bad lawyer would be able to create in thier sleep(in other words it is too easy to get this done and you are out of 75K and you will not have much of a defense - non actually)
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Careful with using the term matrimonial home. They were not married. They were CL, and the only reason why she has any stake in the house is due to her name on the deed.

You may have a valid point, but you appear to be applying matrimony law here. In NS, your argument is covered under the Matrimonial Property Act, which doesn't apply to CL.
 
You may allege a loan agreement but did you ever make a payment? If not, might be interpreted as gift.

Or maybe your loan was due on sale of house?

I think your ex may be referring to situation where exempt monies are deposited into joint account or used for down payment and thereby half is gifted to other party.

Try searching "matrimonial property" and "gifted". Hope I am not misinforming you.
 
beebie said:
Try searching "matrimonial property" and "gifted". Hope I am not misinforming you.
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Once again, matrimonial applies to people that were married. They were CL. Check out this case law: http://www.canlii.org/eliisa/highli...n/ns/nssc/doc/2011/2011nssc34/2011nssc34.html

They were CL and had a house jointly owned. However, the guy put 20K towards it from a previous solely owned property. In item 76 the judge states "Although the Applicant originally sought an unequal division of the net equity in his favour to take into account the $20,000.00 equity that was transferred from the house that he owned in 2003 to the house in Ottawa and eventually to the house in Cole Harbour, he is now satisfied that he has received that money back through the refinancing of the mortgage which took place in 2009."

This leads me to believe that the judge may have awarded him a 20K unequal division of the net equity, had the applicant not conceded to getting that money back. This whole "matrimonial home" thing doesn't apply because they were CL.

Also note that "net equity" was the factor. There is no equity in the Op's home because the money is still owed. He has a loan for 100k with his brother. The other 50k is factored into his inheritance. A CL partner doesn't get 50% of your inheritance. He may have a snag though, if he deposited that 100k or 50k into a joint account.
 
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Right that was matrimonial property law but are you totally sure that law of constructive trust won't result in same division?

Also here is the case quote from an Alberta case. Wife got one quarter of gift. Alberta matrimonial property law allows exemptions from property division and not sure if Ontario law also does or if house is just divided slam dunk :

In Jackson v. Jackson (1989), 97 A.R. 153 (C.A.), the husband’s mother gifted to the husband $60,000. The money was used as the down payment on a jointly-owned matrimonial home. The Court upheld the decision of the trial judge, concluding that the husband had gifted half of the funds to his wife, making that half of the original gift from his father divisible as matrimonial property.
 
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