Contact Us


KOGARAH OFFICE
Suite 309 – 310, Level 3
13A Montgomery Street
KOGARAH NSW 2217


SYDNEY CITY OFFICE
Ground Floor
54 Martin Place
SYDNEY NSW 2000


Email: solicitors@gmhlegal.com
Phone: (02) 9587 0458
Facsimile: (02) 9587 2936


The Traps of a Granny Flat Accommodation

When the elderly decide to live in a ‘granny flat’ near their children, they sometimes fail to take account of the risks of such a move.  They also sometimes fail to consider the unforeseen outcomes of personal relationships and personal challenges which ill health, financial difficulty and ultimately death that such a proposal may present.

The elder plaintiff then aged 72, engaged his only son as one of the defendants in litigation over funds which had been contributed to the extension of a house in which the family had lived.

In 1978, the plaintiff who was then aged 69 discussed with his son the possibility of selling his unit, having recently being widowed, and moving into the home owned by his son and daughter-in-law, and in which they were living with their two sons.  The proposal was that the proceeds of sale of the home unit would be used to pay for the construction of a second storey extension to the house which would be occupied by the father.  It was intended he would become a part of the family household, eat with them, do some household chores and help them with their business activities.  It was not proposed that he would have any responsibility for rates or taxes or other household outgoings.

There was no discussion about the living arrangements or what would happen if the relationship broke down or if the son and daughter-in-law wanted to sell the house.  There was no discussion about whether the proceeds of the sale of the unit were meant to be a gift or were characterized in any other way.

From the sale of the unit, an amount of $28,000.00 was put into an account which was eventually paid to the builder who completed the new second storey extension.  Regrettably, soon after the extensions were completed, a breakdown occurred in the marriage between the son and daughter-in-law resulting in the departure of the son from the house.  That was followed by a serious deterioration in the relationship between the father and daughter-in-law as a result of which he also left the house.  A divorce followed and the son remarried and went to live in Melbourne.

The Supreme Court stated:

“… wide(r) equitable principles operate in the present case.  The plaintiff spent money on the defendants’ property in the expectation, induced or encouraged by the defendants that he would be able to live their indefinitely as a member of their family.  This expectation has been defeated by the occurrence of events which were not in contemplation when the money was spent and as a result of which any subsisting right of residence by the plaintiff in the property is now of no practical consequence.  In my opinion, on the facts of this case, it would be unconscionable and inequitable that the defendants should now retain the benefit of the expenditure by the plaintiff of his money on their property free of any obligation of recoupment to him.”

In the event, the court ordered that the plaintiff father have an equitable charge over the house property in the amount which he had invested with interest and in that way, the demands of justice and good conscience were satisfied.

Should you require any Elder Law advice, please contact the Principal Solicitor for GMH Legal, Mr George Hanna on 02 9587 0458 or by email on ghanna@gmhlegal.com .

Comments are closed.

Call the experienced team at GMH Legal to assist you in your matter. A free consultation with GMH Legal is an opportunity to gain deep insights into your legal situation and all of your options.

Why Choose GMH Legal?

  • Over 60 years of combined legal experience
  • Outstanding track record with a winning approach
  • First appointment is always free
  • Meet our team now.


banner banner banner banner banner banner banner banner banner banner