The bank of mum and dad – what happens when it all goes wrong?

14 December 2020

Parents are financially supporting their adult children more than ever before. We are increasingly seeing situations where parents have paid money to their adult child (and, commonly, to their child’s spouse), typically as a contribution towards the purchase of a property or to pay for renovations.

A classic example of this is where the family agrees that the parents will live with their adult child, such as in a granny annexe at the property. In that case, money is often advanced by the parents, either to buy the property in the first place or to build the granny annexe, on the basis that they will then live in the annexe for so long as they wish.

If relations within the family subsequently breakdown, questions arise as to the parents’ right to remain in occupation and/or recover their money. Such disputes can become even more difficult where the adult child was married and is now getting divorced. In those instances, the property will be subject to any financial order made by the family court as part of the divorce proceedings. In order to protect their interest, the parents will need to consider whether to apply to be joined to the matrimonial proceedings as an ‘intervening’ party. Otherwise, the court might simply divide the property between the husband and wife and take no account of the parents’ interest.

We have extensive experience of dealing with such disputes at Birketts. The firm benefits from both a highly acclaimed Family team and a specialist team of property litigators, who work collaboratively to provide comprehensive advice and representation. While these kinds of cases are typically dealt with exclusively by family lawyers at other firms, our clients benefit from the guidance offered by our knowledgeable property litigators, who are well-versed in the civil court rules which apply and the technical legal arguments that come to the fore when representing parents in this unenviable position.

Should the issues raised in this article be of relevance to you, please do not hesitate to contact Laura Tanguay.

The content of this article is for general information only. It is not, and should not be taken as, legal advice. If you require any further information in relation to this article please contact the author in the first instance. Law covered as at December 2020.


Laura Tanguay

Senior Associate

+44 (0)1473 299188

+44 (0)7815 701451


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