It has been said that the road to hell is paved with good intentions. The same could be said for the road to the courts, when families come into dispute over property arrangements. Recently, the Queensland Supreme Court considered an appropriate outcome for the failure of a “granny flat” arrangement – where Bonnie C came to an agreement with her daughter Shannon A and son in law, Brett, for Bonnie C to contribute toward the price of a property and for its improvement to create a granny flat, in return for having the right to reside in that property for the remainder of her life. This sort of arrangement is not uncommon because it has – at first blush – advantages for all of the parties. For the parent, it provides the security of being close to family, potentially a better place to live, and access to care. For the children, it provides proximity to the parent, and the introduction of more money to buy a better property, with an increased capital value in the property. There are also other benefits, particularly if the parties have a strong relationship or if the parent is able to help with looking after grandchildren or the property itself. However despite the best of intentions and rosiest of expectations, tensions arise when people live in close proximity. The most innocent of activities can become extremely annoying. For some the “5 second rule” applies to visitors as much as food dropped on the floor. The relationship can deteriorate, and continued living in close proximity become impossible. As lawyers, we often become involved in these matters when there is a problem. In many cases, that problem arises very early on, sometimes within a matter of days. The issue however is that once the money has been spent and the parties are living in this new arrangement, how will a court deal with one of them wanting to leave, and what is their interest in the property? In the dispute between Bonnie C, her daughter and son in law, the court considered this situation. The judgment records the following: There was also a question of costs. This matter demonstrates the risks associated with “granny flat right” agreements, and for that matter, any long term agreements in relation to property. Those agreements should not be entered into without the parties giving thought to how they might fail and what to do if they do fail. For advice in respect of the co-ownership of property or for agreements and rights in respect of property, please contact our property lawyers Peter Muller at peterm@qbmlaw.com.au or Jessica Murray at jessicam@qbmlaw.com
