11/06/2019 16:19 EST

A Contract Is Awkward But Necessary When Couples Move In With Parents

Things can get ugly if you don't set expectations before making the move — and a lawyer helps.

Find a partner, buy a house, get married, live happily ever after. That narrative has become less relevant to Canadians, especially with an astronomically high cost of housing. We all need a place to live, but the reality is not everyone can afford to buy their own place. Consequently, more couples are choosing to live together in the home of one of their parents.  

When adult children bring a romantic partner into a parent’s home, this dynamic living arrangement provides benefits to all. The adult kids may get some additional help from grandparents if they have children of their own, and the parents may be able to put more away for their retirement if the kids are paying for some of the mortgage. But it can also be a major source of conflict — and I’m not referring to fights about whose turn it is to do the dishes or clean the bathroom.

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Families fight. Couples fight. That’s normal. Some couples end up separating or getting divorced. This, too, is not uncommon. However, if a separation occurs while the pair is living in one of their parents’ home, legal troubles may follow. 

To give you a clearer idea of how common multigenerational households are becoming, 6.3 per cent of Canada’s population living in private households lived in a multigenerational household in 2016. That’s about 2.2 million people. 

Ontario has the highest rate of adult children still living with parents, and Statistics Canada noted in 2016 that the GTA saw between half and three quarters of young adults still living at home, with multigenerational households being one of the fastest-growing demographics. Perhaps unsurprisingly, the number of adults living with their parents is higher in the GTA than in any census metropolitan area in Canada, with the exception of Vancouver.

In our practice, we have seen an increasing trend of multigenerational disputes as a result of breakdown of an adult child’s relationship. 

These cases can be some of the most difficult to resolve.

In one such example, a common-law couple was living together in the basement of one of their parents’ homes. The couple thought that they should contribute something towards household expenses, and so they renovated the basement and helped pay for general upkeep. The couple separated, and the woman, who was not biologically related to the parents, left the home. She calculated that she and her partner contributed about $50,000 towards the home and upgrades during the time they were both living with the parents.

The woman believed that she has an interest in the house, but the parents maintained that the contributions were no more than rent. No agreement was made to clarify what the contributions were for, or if they were even required. 

The woman does have a potential claim against the home. Even though she did not own the home, she can claim that through the contribution of her labour, time and money, the parents (and perhaps the other partner) were enriched at her expense. This is called an unjust enrichment claim. 

In another example, the parties were married. In this case, the woman refused to leave the home because that was the matrimonial home (the home ordinarily occupied by a person and their spouse as their family residence). In Ontario, the matrimonial home affords certain legislatively prescribed protections, including one that gives each spouse the equal legal right to have possession of the matrimonial home they formerly shared, no matter which of them holds legal title.

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Without a rental agreement that allows for eviction, the case will likely have to be resolved in court. Property division may also factor into the complexities of this case, as property and assets are also shared between married couples when they separate.    

Though both of these examples are rife with family conflict, no one is being malicious. In fact, problems usually occur in these types of cases because everyone assumed that they would live peacefully as one happy family. No plans or expectations were verbalized by the kids or the parents and, unfortunately, that led to a genuine disconnect of expectations.

Don’t assume that everyone is on the same page.

These cases can be some of the most difficult to resolve. Not only are these parties who thought they would be saving money by living together now responsible for hiring legal representation and paying legal fees, but they’re now having to fight with the people they care for most. Parents never want to make a case against their children, especially when they are already dealing with a separation or divorce, but the house might be their only valuable asset. They can’t afford to lose it. Similarly, the kids might feel that they cannot afford to walk away from all of the money they have invested in someone else’s home. 

The good news is that the parties can protect themselves by setting clear and transparent expectations of each other, and documenting these expectations in an appropriate agreement, such as a rental agreement and/or marriage or cohabitation agreement. Speaking to a lawyer in a transparent manner early on would definitely assist in setting up a structure which puts in to effect what all parties expect of each other.

Finally, it is highly recommended that parties keep all receipts and payment records if they are planning to invest in the parents’ home. Figuring out who is entitled to what can be very challenging without some sort of domestic contract, but it’s so much more challenging without that proof.

When parents agree to let their child move in along with their partner, all parties can benefit from the arrangement. But it’s important to remember that problems between family members can arise. Don’t assume that everyone is on the same page, talk about expectations and have a plan in place should something go wrong.

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