Mortgage Broker

18 | spring 2019 cmba-achc.ca CMB MAGAZINE legalease ISSUE More and more oen, more parents are putting up more money to help their children with more expensive house purchases than in the past. ere is considerable potential for true misunderstandings and disputes of convenience as to whether these large amounts of money were intended as a gi, loan or investment. Our Spring 2014 edition at page 36 (see the Magazine Archive at https://www.cmbabc. ca/) sets out a detailed summary of some key points and considerations to minimize the potential for later difficulties. e primary suggestion is to determine and document the intentions of the parties. e article also sets out presumptions Courts make as to the intentions of the parties in the absence of proof otherwise. You are highly encouraged to read, or reread, that article together with this article. e BC Supreme Court in Iberg v Claridge, 2019 BCSC 165 provides an excellent example of what a Court might do if it finds that one party was unjustly enriched by the transfer of monies. WHAT HAPPENED? An approximately 65-year-old mother provided well over $100,000 toward the purchase of a house to live in with her 35-year-old son. She also paid significant sums for furniture, appliances in the two suites, and landscaping. Her understanding was that her son and her would each live in their own suite; indeed, that is how it was for about 10 years. e son contributed no money toward the purchase but did sign the mortgage as the sole borrower. e mother and son paid equally toward the mortgage payments and expenses. When the relationship unravelled, the mother claimed she was a joint owner of the property; the son claimed he was the sole owner and that his mother had gied him the down payment. He wanted her evicted for unpaid rent, the mother having missed her first "rent" payment in 10 years. e mother discovered around this time that when closing the purchase she had assigned the purchase agreement to her son and signed a residential tenancy agreement making her a tenant of her son. e mother wanted the Court to declare an interest for her in the house on the basis that the son has been unjustly enriched by the monies she put toward the purchase. LEGAL REQUIREMENTS Courts presume, as a starting position, that a GETTING BACK YOUR 'GIFT' It can pay to make it clear why money is being transferred – particularly when dealing with family members BY RAY BASI, LL.B., STAFF EDUCATION AND POLICY REVIEW gi was intended where a parent gratuitously makes a transfer to a dependent minor child. e presumption does not apply to a transfer made to a dependent adult child. Equity assumes bargains and not gis. e son has to similarly prove the gi to show that he has not been unjustly enriched. For there to be unjust enrichment, there must be: n enrichment (in this case, receiving the benefit of the transferred money) n corresponding deprivation (in this case, being out the money provided) n no juristic reason for the enrichment and deprivation (in this case, no reason why the son should be enriched at the expense of the mother. For example, the mother did not owe the money to the son to satisfy a debt or obligation.) It really comes down to the Court looking at the circumstances and determining whether it would be fair to let the person keep the money they gratuitously received. OUTCOME e presumption of a gi did not apply in this case because it was made by a mother to an adult son. e presumption is that the money was not intended as a gi.

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