PARENTS ASSISTING CHILDREN WITH A HOME PURCHASE

A November 12, 2021 BNN Bloomberg article (Family disputes over gifted down payments on the rise: Law firm, Michelle Zadikian) discussed the trend of parents financially assisting their children in the purchase of real estate.

The article recommends that, while discussions of the transaction can be verbal, the final agreement should be in writing to protect both parties. Issues that should be considered include the following:

• whether the funds are a gift, a loan, or an equity investment in the property;

• if the funds are a loan, the expected repayment terms and interest to be charged;

• what is expected to be done with the funds;

• whether the child’s partner is entitled to any of the funds; and

• what happens to the funds should the child’s relationship 1 or marriage break down.