# My DP... Her apartment = Win ?



## OK-bachelor (May 24, 2011)

Well , I made you look 

Lets throw my latest idea around a bit. My gf rents her own apartment in the West End of Vancouver, and I am a owner of a house with about 175k equity 34 kms N/E from her. I am thinking about getting an apartment in my gf's area , to rent out for investment purposes , and also for a second place to live if that option became available . 

If I had the down payment , and the gf was interested in living there and paying most of the mortgage, would this be a good deal for both of us? And what legal arrangement should we have to make it a good fair deal for both of us?
Thanks


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## Causalien (Apr 4, 2009)

I forsee a world of hurt from this.


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## onomatopoeia (Apr 8, 2009)

I can only see this as being bad for you all around. Basically, you want to become your girlfriends landlord in a negative cash-flow situation.

Great for her.

That works well for now as you are a nice guy and helping out your gf, but if you break-up, you are still her landlord and you can't just tell her to leave or jack up the rent. So then you are subsidizing your ex-girlfriend to live in your place.

Better idea: Buy the place to rent, rent it out to someone else in a positive cash-flow situation. Buy her a nice necklace with some of the monthly profits.


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## the-royal-mail (Dec 11, 2009)

sigh. There seems to be no end to the specuvesting and shell games. Oh well, at least my fellow CMFers and I are in agreement. This is simply a bad idea.

Keep your life simple. Have her look after her own housing arrangements and don't think you're being clever by investing in RE merely as a source of rental income. Most people are not fit to be landlords.

Please read Berube's post in the "Buying a second condo, can I do this?" thread. Seriously.


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## KaeJS (Sep 28, 2010)

Bad idea.

Once again, it is becoming more complicated and the risk is increasing.

If you want a second place for rental purposes, leave the girlfriend out of it.

Have her move in with you, if that's what you want. She can pay rent, and then if you want to kick her out later, you can do so (since it is your house).


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## MoneyGal (Apr 24, 2009)

...and then you can await the legal papers claiming your ex-GF has a trust interest in your property. (Hint: the longer the relationship, the more likely the courts are to side with ex-common-law spouses who make trust claims in non-jointly-owned property.)


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## drip99 (Aug 27, 2009)

MoneyGal said:


> ...and then you can await the legal papers claiming your ex-GF has a trust interest in your property. (Hint: the longer the relationship, the more likely the courts are to side with ex-common-law spouses who make trust claims in non-jointly-owned property.)


^^^^Print this and put it in your wallet........read every hour


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## KaeJS (Sep 28, 2010)

Hm. Yes.

I forgot about that whole common-law thing.

And I think I heard they recently changed it from 1 year to 6 months. Is this true?


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## crazyjackcsa (Aug 8, 2010)

Don't listen to them! I think it's a great idea! Jump in with both feet!


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## kcowan (Jul 1, 2010)

the-royal-mail said:


> sigh. There seems to be no end to the specuvesting and shell games. Oh well, at least my fellow CMFers and I are in agreement. This is simply a bad idea...


I think it is the realtors that propagate these bad ideas.


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## donald (Apr 18, 2011)

No matter what you do your screwed mingling your money with the GF.
Leave the gf out of it! Ive seen to many guys get "**** kicked" And have to rebuild.

Risk is high.Esp if she has squat and brings zero to the table....no brianer.Sad but true.Protect yourself Mate.


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## Berubeland (Sep 6, 2009)

kcowan said:


> I think it is the realtors that propagate these bad ideas.


How can you lose? It's real estate  and love combined  What could go wrong?


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## marina628 (Dec 14, 2010)

My friend bought a house and his girlfriend moved in on closing day with him.He had her sign rental agreement and he thinks there is no way she will ever have claim on this house.Some people are just asking to get screwed lol


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## Causalien (Apr 4, 2009)

MoneyGal said:


> ...and then you can await the legal papers claiming your ex-GF has a trust interest in your property. (Hint: the longer the relationship, the more likely the courts are to side with ex-common-law spouses who make trust claims in non-jointly-owned property.)


I've been thinking about this tactic and would like some comments from more experienced people.

Say he signs a loan agreement, basically someone else in the family where the collateral is the house and the family member lends him the amount for the mortgage.

When the common law breakup suits starts, will the girlfriend's claim on the house be lesser? i.e. (Total equity - family member's loan)/2


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## MoneyGal (Apr 24, 2009)

1. If his name is not on the title, there's no risk. If his name is on title, and he has equity in the house, that equity is at risk. 

2. Pre-nup is the way around this, actually. Although in this case it is technically a cohabitation agreement. 

3. But nothing can stop a vengeful ex-common-law spouse from making a constructive trust claim.


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## Causalien (Apr 4, 2009)

So moneygal, you are saying that both he and his family member's equity will be at risk in my scenario?

Anyway, I find this situation pretty strange. I try to put myself in his shoes and imagine. Can the OP clarify who suggested this idea? As a guy, it doesn't make sense to do this. Why would you even charge her rent? Just have her move in with you if you want to lower her rent. Why go through all this trouble just to reduce a little bit of her rent? Fire that RE agent.


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## MoneyGal (Apr 24, 2009)

Nah, I was just saying that his equity is at risk. If his equity is (then immediately) reduced by a demand loan from a parent, technically the loan would need to be called so that his equity is transformed into debt in order to avoid a claim. 

HOWEVER, we are now beyond my basic understanding of family law. I do know that demand loans are used by parents who want to help kids out with purchasing property but are concerned about protecting their kids in the event of a marriage breakdown. 

The problem with common-law relationships is that they are not well-defined in law (as should be obvious from the name...). Before same sex marriages were recognized, same-sex couples relied on trust claims to establish one spouse's ongoing financial responsibility for the other spouse, or one spouse's claim to the financial assets of the other spouse. 

The other issue is that the concept of the matrimonial home is unique as an asset in conjugal relationships. Buying a house in which two spouses (whether married or not) live during their relationship is different than buying any other asset which is shared. Even though there is no matrimonial home in common-law relationships, the concept of the matrimonial home and the special or unique status of the home in which both parties live during a conjugal relationship is still present. 

If you are going to buy a home and live in it with a girlfriend or boyfriend, you should (1) get legal advice and (2) sign a pre-nup or a cohabitation agreement which spells out how that asset will be treated in the event the relationship breaks down. This doesn't protect you against a trust claim, but will help fend one off. 

For what it's worth, the issues aren't necessarily any LESS complex in matrimonial homes when a couple is legally married - they are just different.


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## OK-bachelor (May 24, 2011)

the-royal-mail said:


> sigh. There seems to be no end to the specuvesting and shell games. Oh well, at least my fellow CMFers and I are in agreement. This is simply a bad idea.
> 
> Keep your life simple. Have her look after her own housing arrangements and don't think you're being clever by investing in RE merely as a source of rental income. Most people are not fit to be landlords.
> 
> Please read Berube's post in the "Buying a second condo, can I do this?" thread. Seriously.


 In this thread, there has been some funny , and some familiar sarcasm that I enjoy taking, and dishing out too. Thank goodness for the age of the internet , in respect to - I asked a (may seem naive) question, but none the less , it turned out to be a good question , as I received numerous good answers.
Like most of the sheeple , I think too much, and prefer instant gratification. However, I'm no fool , as is demonstrated when I turn 40 this month , and can give myself a pat on the back for not getting married/common law ,or creating any dependants . In a society that has MANY self serving, and absent parents , it has given me a lot to learn from and to grumble about. I'm not a gambling man , and the stats consistently show that 50% of marriage ends in divorce. Do the surviving 50% have an easy time while swimming in a pot of gold and happiness ? 
When it comes to the partners I have chosen in the past, I can't say that I am any more clever than the next guy.
I will continue keeping my life simple , and encouraging my GF to become independent .She has done very well so far, and I didn't mention to her my idea , and it will remain another one of my many thoughts, that I don't make a reality.
Thankyou everyone for all the great advice.


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## tobuyornottobuy (Nov 19, 2011)

I like your new plan better!

I had a friend in the UK who ended up losing half his house to his ex-GF, and we dont even have common law there, I am pretty sure where there is common-law she would have a very strong legal position.

Of course noone is saying you will split up...but just covering all eventualities!


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## v_tofu (Apr 16, 2009)

Do it!!

Homes always go up in value!! There is nothing to fear, everything is fine! You have nothing to lose


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## OK-bachelor (May 24, 2011)

v_tofu said:


> Do it!!
> 
> Homes always go up in value!! There is nothing to fear, everything is fine! You have nothing to lose


Besides , divorce is good for the economy!


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## Cal (Jun 17, 2009)

You seem to have good intentions, but are looking thorugh rose colored glasses.

You have to think worst case scenario. That could be scary.

Luckily there are other ways to make money and put your equity to work for you.


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## OK-bachelor (May 24, 2011)

Cal said:


> You seem to have good intentions, but are looking thorugh rose colored glasses.
> 
> You have to think worst case scenario. That could be scary.
> 
> Luckily there are other ways to make money and put your equity to work for you.


 Any research suggestions ?


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## carverman (Nov 8, 2010)

MoneyGal said:


> Nah, I was just saying that his equity is at risk. If *his equity is (then immediately) reduced by a demand loan from a parent, technically the loan would need to be called so that his equity is transformed into debt in order to avoid a claim*.


Yes, that is correct, speaking from my own nasty divorce experience, on a marital home, unless it is registered as a mortgage, it probably isn't going to hold to much water in "divorce" courts..or a lawsuit resulting from breakup of a 
common law or traditional marriage (one without a pre-nup). The loan, as you say would have to be filed by the
parent making the loan. in court against the marital or co-habitation property to recover the parent's interests. 

In my case, my lawyer advised me... to tell my mother to
hire a lawyer and sue my ex...who was suing me..for
divorce and the assets of the marriage. 
My mother thought about it, but decided not to pursue it and in the end lost all of her $50K that she helped
us out as a loan. The issue here argued in court was
that that the ex-wife never agreed to it, or actually
signed the loan, Her position all along was that it was a "gift" from the mother to her son, and nothing to do with her.
So these are the nasty pitfalls when it becomes a fight over money! Trust and decency go out the window. 


[/quote]
HOWEVER, we are now beyond my basic understanding of family law. I do know that demand loans are used by parents who want to help kids out with purchasing property but are concerned about protecting their kids in the event of a marriage breakdown. [/quote]

This is what happened to me. In the end, the loan because it was not registered, even though it was notorized, didn't hold much water in the division of marital assets..because it was not registered as a mortgage,
so her lawyer argued that it was a "gift" to the son. 

Anyone who wants full protection has to register the loan against the property.

In my case, my mother NOW is co-owner of my house (bought before divorce, but after the date of separation)..to protect me from further legal action, although this time she only gave enough for a down payment, having lost the $50,000 of her retirement money,
on the loan given to us while married for the marital home. 

It is very nasty business in the courts when it comes to determining if a loan arranged between the parent(s) and the son can stand on it's own merit in the family (divorce) courts.



> The other issue is that the concept of the matrimonial home is unique as an asset in conjugal relationships. *Buying a house in which two spouses (whether married or not) live during their relationship is different than buying any other asset which is shared*. Even though there is no matrimonial home in common-law relationships, the concept of the matrimonial home and the special or unique status of the home in which both parties live during a conjugal relationship is still present.


That seems to correct from my unfortunate experience.



> If you are going to buy a home and live in it with a girlfriend or boyfriend, you should (1) get legal advice and (2) sign a pre-nup or a cohabitation agreement which spells out how that asset will be treated in the event the relationship breaks down. This doesn't protect you against a trust claim, but will help fend one off.


Yes, never go into sharing a property or asset situation these days without legal advice and signing a prenup. 

If I knew then ( in 1970), what I know now about relationships going bad over time..I would have *never gone into one on blind trust. * You can end up on the
street very quickly!


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## 50invester (Feb 10, 2010)

OK-bachelor said:


> Any research suggestions ?


OK-Bachelor: Please, please, please, don't buy at the top of the market in the MOST expensive place on earth. You are an invester, NOT a fool, right. On the GF thing, well, I would say if your really serious about doing this, go see a lawyer. I understand pre-nups, but if your not living together, then that is not 'Common Law'. Still, go see a lawyer. Good Luck. 

p.s. Please don't buy anything for awhile, even if your renting it out.


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## OK-bachelor (May 24, 2011)

50invester said:


> OK-Bachelor: Please, please, please, don't buy at the top of the market in the MOST expensive place on earth. You are an invester, NOT a fool, right. On the GF thing, well, I would say if your really serious about doing this, go see a lawyer. I understand pre-nups, but if your not living together, then that is not 'Common Law'. Still, go see a lawyer. Good Luck.
> 
> p.s. Please don't buy anything for awhile, even if your renting it out.


 I am not at all serious about doing this. She either can, or can't save enough for her own down payment , and in the future ,maybey her parents can give her a loan .
We are not common law and I want to keep it that way. I would not consider living with a woman unless she brought an equal amount to the table. I dated a woman in the past who received the majority of her stuff from a divorce, and that made me hi-tail it and run away. I don't want to sound like I am bashing women in any way, but our culture has made divorce normal , and part of the economy. After a divorce, most objects that were shared , are now doubled in seperate households. Lawyers make wheelbarrels full of money. The entire machine of marriage and divorce is encouraged , influenced , and manipulated.
Besides which, my flat is an open concept, renovated by me , and it is the ultimate man cave now. Practically speaking , there is no room for a girl with all her stuff here , Monday mornings are clear out time, the party is over.
Sometimes I see through rosy glasses , but usually I am realist and somewhat a pessimist.


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## carverman (Nov 8, 2010)

OK-bachelor said:


> I would not consider living with a woman unless she brought an equal amount to the table. I dated a woman in the past who received the majority of her stuff from a divorce, and that made me hi-tail it and run away. I don't want to sound like I am bashing women in any way, but our culture has made divorce normal , and part of the economy. After a divorce, most objects that were shared , are now doubled in seperate households. Lawyers make wheelbarrels full of money. The entire machine of marriage and divorce is encouraged , influenced , and manipulated.


I hear you. I've been one that has been manipulated by the courts and lawyers and after 4 years of legal see-sawing, her lawyer stalled the court date twice to allow the ex's divorce filing case to be heard by A "PRO-WOMAN"
female judge..according to my lawyer. 

In the first day of a 3 day trial, when he saw the female judge arrive ..he wispered to me.."oh! oh!..I think we
are in trouble"..and so it was, he screwed up on the timing of the my last financial statement and the pro-woman female judge didn't accept my financial statement,so it
was MY fault and I got royally shafted by the court and still paying for it this very day out of my pension, small
as it is. 

I shall never forget this... (shafted by the Ontario courts)..where the ex can remarry and improve her living standards while she raked off over a $100K in property settlement, (she never paid a penny towards the mortgage..I paid for it all), half of my pension, and RRSPs and the female judge put a JUDGEMENT on me! 

I was forced to pay $1000 a month INDEFINITELY (garnished from my wages ) until I retired, while she gloated to her friends that she found a shark lawyer and judge that "stuck it to me!"

Now I'm still paying $300 out of my pension and that according to the 5th lawyer I had at time of retirement
(yet another $30K in legal costs) was because of my pension growth..since the time of divorce!
Screwed again by the legal system! 

Excuse me?..but the pension was split 50-50 at time of
divorce and she got a lump sum from my share of the
marital home..that in the end, I didn't get a penny
out of it..and she file a motion to kick me out of my
own home, then rented it out at my expense!

Divorce in Canada (especially Ontario), has the pendulum (of legal fairness) swung the other way towards the women. 
It will be a long time, (because of legal case prescendence)that a man will get fair treatment in divorce court. 
After they pass judgement on you....
they don't care if you live on the street as a bum..
...as long as you have the financial resources to pay off
the judgement..where they will set 6% interest on
any unpaid balance, SEIZE YOUR BANK ACCOUNTS
and any assets remaining to your name..if you don't
pay up. 

So my advice...is* do not enter any kind of co-habitation without a lawyer present these days*..the legal cost up front is MINIMAL compared to what
it will cost you in the end..if the relationship you had, doesn't work out!


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## OK-bachelor (May 24, 2011)

carverman said:


> I hear you. I've been one that has been manipulated by the courts and lawyers and after 4 years of legal see-sawing, her lawyer stalled the court date twice to allow the ex's divorce filing case to be heard by A "PRO-WOMAN"
> female judge..according to my lawyer.
> 
> In the first day of a 3 day trial, when he saw the female judge arrive ..he wispered to me.."oh! oh!..I think we
> ...


 Sir , thankyou for taking the time to clearly explain your life situation, and I hope you found some peace and quiet through all of that.
I share a property 50/50 with my older sister , and her husband was previously married with two kids. I have witnessed some of the ugliness that arises from divorce. More to do with how the kids are being neglected by the ex , and not as much to do with money. Divorce is hardest on the kids, and when one of the parents doesn't step up to the plate , and try to be a good mother , then the father is always spinning his wheels ,while lacking the necessary ally during the tough job of raising kids.

Anyways , I don't want to clog up the real estate section with fiasco after fiasco.


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## the-royal-mail (Dec 11, 2009)

OK-Bachelor, FYI it's not necessary to quote every single post you reply to. Please use the reply button instead and simply address the person if need be. We can read through the thread if we really need to see what you are responding to. Thank you.


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