A granny flat arrangement can be a useful and convenient arrangement to enable an elderly parent or relative to live closer to the rest of the family, but also accommodate privacy and security.
Sometimes these arrangements, however, can also lead to disputes or broken relationships. It is important to be aware of the legal issues that may arise out of such an arrangement, to better prepare yourself against conflict.
What is a granny flat arrangement?
A granny flat arrangement can involve having two dwellings on the same property, to be shared between the main residents (normally the child) and an elderly parent or relative who lives in smaller accommodation. The two most common arrangements are:
1. Both the child and the elderly parent contribute their resources (i.e. money) to buy a property that has a granny flat already built on it.
2. The existing property of the child has a granny flat built on it for the elderly parent to move in. s
Both arrangements can lead to legal issues, such as who has a legal interest in the property? Or in the absence of a legal interest (such as a written contract), an equitable interest may be found to entitle one of the parties to relief in the event of a dispute.
The equitable principles are important in granny flat arrangements, as elderly people may be more vulnerable to trusting their children to provide them a home for life.
What to do?
Sourcing independent legal advice is critical before arranging a granny flat arrangement. It is important to analyse the intentions and expectations of both parties before entering into an agreement. Once an agreement is reached, drafting a clear, unambiguous contract with instructions for how a dispute can be resolved will be beneficial for all parties if a disagreement arises.
Contact Ivan Kent to discuss in detail you and your family needs regarding making a granny flat agreement.