We often discuss the importance of having a will in place to prevent unnecessary litigation following your death. However, as we often see, simply having a will in place is often not enough to avoid contentious issues from arising. This was the case in a recent decision from the Ontario Superior Court of Justice where the court had to determine an issue related to occupational rent that arose after the owners of a home had died.
Two homeowners, two wills, different beneficiaries
The deceased couple were a husband and wife who owned a home, but failed to agree on how it would be passed on following their death. The mother and father owned the home as tenants in common. This type of ownership means that each party would be able to dispose of their 50% interest in the home through individual wills. The mother left her interest to the couple’s grandchildren.
The mother predeceased the father. Upon her death, the couple’s son (who is not the father of the grandchildren) moved into the home with his partner and their children in order to look after the father. The father died about five years after the mother, on November 4, 2017, leaving his interest in the home to the son. The son and his family continued to live in the house, rent-free, until April 30, 2020.
The grandchildren look to sell the home
The grandchildren were eager to realize the value of the home, but did not seek to sell their interest in it, nor did they ask the grandfather for rent while he was living there. However, after the father died, the grandchildren became eager to sell the house. The only problem was that the son and his family did not want to move out of the house, nor would they purchase the interest held by the grandchildren at a price they would accept.
The issue of ownership and possession of the home was settled on January 13, 2020. The only issue remaining to be decided was whether the son owed the grandchildren occupation rent for the two-plus years he and his family lived rent-free in the house.
Are the grandchildren entitled to occupation rent?
The grandchildren had wanted the son to either buy their share of the house or move out so it could be sold as soon as the father’s death. They were seeking 30-months of rent at a rate of $1,770 per month, representing their 50% ownership of the home.
The court found that there had been clear enrichment by the son, who avoided paying rent for just over two years while enjoying exclusive possession of the home. While he did pay some expenses, he received a greater benefit than what he paid through expenses. Furthermore, the grandchildren were barred from the home, and were not able to sell it in order to realize their interest in it. The court explained, “the son effectively assumed the right to exclusive access to the home and, without authority, barred the grandchildren from even entering it.”
However, the court also noted that the grandchildren had not requested any rent until February 1, 2019, over a year after the death of the father. As a result, the court ordered that the son pay rent of $1,500 per month retroactively from February 1, 2019 up until the date he moved out.
If you have been appointed an executor, the estates lawyers at Derfel Estate Law can advise and guide you on all aspects of estate administration, including determining whether or not probate is required, or assisting you if it is. Call us at 416-847-3580 or contact us online to schedule a consultation.