Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m F E B R U A R Y 2 0 1 6 21 s housing prices reach even greater heights, particularly in Toronto and Vancouver, many just starting out have found it difficult to access the home market on their own, frequently turning to fam- ily members to contribute to either the down payment or the financing of the home or both. A parent may even be on title to ensure the financial viability of the deal. Housing debt has become a dominant force in Canada, increasing dramatically over the past 20 years. Statistics Canada reports that more than 70 per cent of our collective $1.874-trillion debt load is due to mortgages. A survey by the Canadian Association of Accredited Mortgage Pro- fessionals further found that over the past two years borrowed money represented more than a quarter of the $18.8 billion used toward the down payment of a home. It found family members provided a gift or a loan 18 per cent of the time to first-time homebuyers. For lawyers, that means additional play- ers to consider in the real estate transac- tion. And, in a role that is ever expanding, real estate lawyers must protect not just their clients but also themselves, particu- larly when more elements are added to the transaction. When that couple decides to buy a home, they may not anticipate future eventualities, such as the loss of a job or the implosion of their relationship. And what happens to them may well impact those with whom they've had some sort of financial arrangement involving the house. "With increased property values and tighter lending restrictions, it is becoming more difficult for young couples to come up with the down payment to purchase a home. Sometimes, they turn to family members, most notably, parents. There's a whole web of issues that come out of this," says Andrew Fortis, a partner at Hum- mingbird Lawyers LLP in Concord, Ont., where he practises real estate and corporate and commercial law. Ontario Superior Court Justice Sean F. Dunphy found himself deliberating over competing claims on a Toronto house last year in Lee v. Lee, in which there were "no villains or victors" only a "thorny problem" raised by doubtful denials that the house was a gift in light of a lack of documentary evidence. At the core of the claim was a home purchased by a couple in the name of their son, who had nothing to do with the house, had never lived in it, and had severed ties with them. After many years of renting it out, it became the primary residence for the couple upon retirement when, at that point, the son, since mar- ried with two children and now divorced, failed to make equalization payments to his ex-wife based partly on the value of the R E A L E S TAT E By Marg. Bruineman KYLE REED Even the family needs protection When borrowing from your parents or lending money to your kids to help buy a home, there are lots of details that should be spelled out. A

• Cover