My son has been in a common law marriage for about 3 years, they have owned a house together for about the same amount of time. She wants the house, he has agreed, she went ahead and had it appraised, after he consulted another appraiser he has agreed on the amount, and that they would split all costs & profits 1/2 & 1/2. My question is that now she is demanding he pay all the down payment back as her parents said it was a gift to her, he has made payments & paid bills just the same as her, there never was any mention that he would be responsible for paying back the whole down payment at time of purchase. What advise can you give. thanks
Province/Territory relating to question: Saskatchewan
If they have been in a common law relationship for over 2 years, in Saskatchewan they are treated the same as a legally married couple when it comes to property division.
Courts have looked at the issue of gifts given to one party in a marriage. If the money from a gift went towards assets that are owned jointly, and in particular a family home, it is rare that a court will many any order that this money is to be kept by just one spouse. Normally once a money gift is invested into joint property, then any exemption that may have existed because the gift was to one spouse and not both will be lost. This is particularly the case when the money is put into a family home, as a family home is divided unequally only if there are extraordinary circumstances, and courts have said that one person getting a gift for a down payment is not in any way extraordinary, but actually quite common.
What matters more is what the spouses do with the money, not what was intended by the giftor, so it will not matter if the parents say that they did not intend on your son benefiting from these funds as the spouses themselves decided to invest the money in a joint asset and family home.
So if the couple is totally divided on this issue and do not settle their property division by agreement, either one could apply to a court (within two years of when they separated, as after that the limitation date expires) for an order to divide the property, including the home. The law favours an equal division of the family home in these circumstances, without any payment back to one spouse for a down payment.
with over 15 years experience.