Protecting Your Contribution When Your Child Buys a Home
If you are a parent helping your child buy a home in Metro Vancouver, you are not alone. I am often approached by parents in exactly your position. Your child is moving in with a partner or getting married, you have contributed a substantial amount toward the down payment, and you want to make sure your contribution is protected. This is completely understandable. Vancouver real estate prices are sky-high, and even a modest contribution often represents years of savings.
What many parents do not realize is that without proper planning, contributions to a child’s home can become a legal grey zone. Courts see this constantly. Money is advanced informally, nothing is documented, and years later when relationships shift or break down the question becomes: Was this a loan? Was it a gift? Was repayment optional? Who actually owns what?
Those questions are surprisingly hard to answer without paperwork. When they arise during a separation, they quickly become expensive, stressful, and sometimes impossible to sort out.
The Informal Loan Trap
In Vancouver, it is extremely common for parents to help with a down payment without any documentation. There is no loan agreement, no recorded mortgage, and nothing in writing to clarify whether the money was a gift or a loan. Everyone is excited, the house is closing quickly, and formal paperwork can feel awkward when everyone gets along.
Unfortunately, informal arrangements lead to some of the most difficult disputes I see as a family lawyer. Courts need evidence. Without it, the parent who contributed the most often ends up unprotected.
Two Practical Steps to Protect Yourself
Register a formal mortgage for any contribution you expect to be repaid.
Do not rely on being placed on title as a joint tenant. Joint tenancy does not protect your financial interest the way a properly registered mortgage does. A mortgage makes the terms clear and enforceable, even many years later.Have your child and their partner sign a cohabitation agreement.
No one expects a relationship to fail, and most do not. But if it does, a cohabitation agreement ensures everyone knows exactly what happens with the property, the contributions, and any payout. It reduces conflict, lowers legal fees, and provides certainty. Most importantly, it protects the parent who invested in the property.
A Cautionary Example
I recently acted on a claim involving a mother who had made significant contributions over many years as her son and daughter-in-law upgraded homes while their family grew. There was no written agreement. Everything was based on informal financial help. When the couple separated, it became nearly impossible to trace her contributions.
The court ultimately ruled that she had no beneficial interest in any of the properties. Her contributions were treated as gifts. She recovered nothing. This outcome is heartbreaking, but it is also common. It is fully preventable.
Do Not Let It Happen to You
If you plan to support your child in buying a home, protect yourself. Register the contribution properly. Put clear agreements in writing. Most importantly, ensure your child and their partner sign a cohabitation agreement that sets out repayment expectations and ownership.
The purpose is not to undermine anyone’s relationship. The purpose is to avoid unnecessary conflict and to make sure your hard-earned contribution is respected.
