Girlfriends Parents Giving Us House Loan, I Have Some Q’s

[jazzmaniac42]

Context: My girlfriends parents are giving us $500,000 as a loan, which we would be paying back to them over time. They are just taking on the role of the bank. This would allow us to purchase a house almost outright.

However, I need to build in some personal assurance into this scenario. Hypothetically, I could pay $X into the house, but if my girlfriend and I broke up, I would not have equity the home, so I need to build this into the situation to make sure I have individual security.

Is this something that is best suited for a contract lawyer? Or who should I speak to?

 

[everlastinggift]

@jazzmaniac42 Contact a lawyer and do up a cohabitation agreement, you will both need separate lawyers to review and sign.
Surprised her parents are not asking for this.

 

[jazzmaniac42]

@everlastinggift It’s in the very initial idea stages tbh. Like I just found out 10 minutes ago.

 

[midddeb]

@jazzmaniac42 You aren't clear in your question. You say they are giving "us" money, if they are loaning it to you and your gf then the house would be in your two names so you would have equal equity. If the house is only going to be in your gf's name then they are giving "her" the money and not you. Completely different situations.

 

[rudee_m026]

@jazzmaniac42 Get some legal paper rn. This can get bad. Fast

 

[jazzmaniac42]

@rudee_m026 Yeah it’s not happening this exact minute, probably next year. But yes, I am certainly going to be getting a lawyer to help iron out the details. I’m certainly aware of how fucked this could get if things were to go South.

 

[rudee_m026]

@jazzmaniac42 Like if u stay together. What if they need the loan back. It will pressure on your relationship. So many problems. But a good opportunity for u

 

[jazzmaniac42]

@rudee_m026 Exactly, there are way more ways it can go South than not. Great opportunity, and I’m thankful, but I’m certainly not going to be naive about how much of a nightmare it could turn into.

 

[destinyseeker]

@rudee_m026 i've seen this go bad for two of my buds in the last 12 months .. same scenario... getting their money back is gonna be an uphill fight.

 

[nalowa]

@jazzmaniac42 That sounds like a good ‘ask-a-law-yer’ question. My two cents is the house is mainly hers, and not yours in the case of a breakup. Maybe they want you to marry her. Houses are big.

 

[jazzmaniac42]

@nalowa Certainly will ask a lawyer. I should have rephrased my question to say “what type of lawyer”

 

[nalowa]

@jazzmaniac42 Some sort of ‘pre-nup’ lawyer can help handle this. I’m sure with more people not entering traditional marriage but living as common-law marriage, they may have some good advice in this situation.

 

[jazzmaniac42]

@nalowa I actually posted in a Canadian law subreddit after everyone confirmed I should speak to a lawyer.

 

[zango11]

@jazzmaniac42 A real estate lawyer to handle the transaction
A lawyer who practices family law for prenups. I believe.

 

[coinlaundryloser]

@jazzmaniac42 As most people have said, get legal advice. I had to look into this a number of years ago but from what I recall, in Canada, rights are different for spouses than for common law when it comes to the home.

 

[thedugster2001]

@coinlaundryloser Family law varies from province to province. However in all provinces the matrimonial home gets split 50/50 whether your are married or common law.

 

[destinyseeker]

@jazzmaniac42 $500K loan undocumented 'pay it back over time' sounds like a gift to me and will hold up in any court.

 

[jazzmaniac42]

@destinyseeker What do you think some implications of it being classified as a gift entail? I’ve already decided a lawyer must be involved when the time comes. But for now I’m just curious

 

[simon10]

@destinyseeker Pretty sure if it’s a gift, the gfs parents would say so.

Even if you don’t hire a lawyer. I’m sure they will.

 

[vivian100]

@jazzmaniac42 Why wouldn't you have equity in the home? If it's your girlfriend, and you're already considered common-law, the home would be considered matrimonial property/asset. Unless otherwise stated in a contract or other law, it's half yours, half hers regardless of the nature of the financing. Heck, if anyone would want a contract, it should be your girlfriend's parents

If you are not already considered common-law, well, that's a tad more complicated. Heck, if it was my daughter and the two of you were not legally considered common-law, I would gift my daughter a home so that at least the initial value of the home would not be considered matrimonial property. Once you've lived together for a year in the gifted home, you would only be entitled to your half of the appreciation after you become common-law.

But that's me, if your girfriend's parents are nice enough to loan you a significant chunk of change. Just find a place that costs that much and say "thank you." I think you're over-complicating what appears to be a really nice gesture from the in-laws.