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HAVING a real granny living in your granny flat is a growing trend.
Many parents are moving in with their children because of the expense and scarcity of accommodation in retirement villages.
But when it comes to your retired parents building an extra room or flat on your property, you need to tread very carefully.
Take the example of a family with two parents, plus a married son and daughter. The parents decide to build a small flat on their daughter's property, using their own money.
No written agreement is in place and occupation of the property is also not registered with the deeds office.
The parents' will determines that the surviving partner inherits everything and if both die, the estate will be divided equally between the children.
While both parents are alive, or if only one of them dies, this could work perfectly well. But in a number of scenarios serious problems can arise, Van Blerk warns.
For example, one parent could die and the remaining one remarry, or the daughter or her husband could be killed in an accident and the surviving partner remarry. Another worst-case scenario is when the daughter divorces.
Parents could also be asked to vacate the property if it gets sold - for instance because of a job transfer to another city, or stress in their daughter's finances.
If both parents die, their son could force his sister to pay an amount to the estate which is equal to the value which has been added to her property. He could contend that the daughter had benefited from an unfair financial advantage, to his cost.
Put it on paper
These are just a couple of the most common problems parents, children and executors could encounter, says Van Blerk.
Potential pitfalls are not restricted to the building of a new flat; renovations to the main house, like the addition of a room or bathroom, could also throw up a number of problems.
How do you pre-empt problems with parents on your property?
In the case of renovations, a written agreement, drawn up by a lawyer, is recommended.
The contract has to stipulate how the payment of electricity, water and other services, property taxes, property insurance and property upkeep will be settled. It also needs to include a formula to determine the value of the renovations – and how it will be settled – when the inhabitants move out, or pass away.
It should also stipulate the exact consequences for the heirs.
One option is that the daughter offers to take care of her parents, in exchange for a reduction in the value of the renovations.
Right of occupation and preferably the mortgage have to be registered in the parents' names. This places some restrictions on the owners of the main property.
Parents and children usually want to avoid written agreements, but permanent renovations to another's property usually holds a number of risks, says Van Blerk.
- Sake24
For business news in Afrikaans, go to www.sake24.com.
Many parents are moving in with their children because of the expense and scarcity of accommodation in retirement villages.
But when it comes to your retired parents building an extra room or flat on your property, you need to tread very carefully.
Take the example of a family with two parents, plus a married son and daughter. The parents decide to build a small flat on their daughter's property, using their own money.
No written agreement is in place and occupation of the property is also not registered with the deeds office.
The parents' will determines that the surviving partner inherits everything and if both die, the estate will be divided equally between the children.
While both parents are alive, or if only one of them dies, this could work perfectly well. But in a number of scenarios serious problems can arise, Van Blerk warns.
For example, one parent could die and the remaining one remarry, or the daughter or her husband could be killed in an accident and the surviving partner remarry. Another worst-case scenario is when the daughter divorces.
Parents could also be asked to vacate the property if it gets sold - for instance because of a job transfer to another city, or stress in their daughter's finances.
If both parents die, their son could force his sister to pay an amount to the estate which is equal to the value which has been added to her property. He could contend that the daughter had benefited from an unfair financial advantage, to his cost.
Put it on paper
These are just a couple of the most common problems parents, children and executors could encounter, says Van Blerk.
Potential pitfalls are not restricted to the building of a new flat; renovations to the main house, like the addition of a room or bathroom, could also throw up a number of problems.
How do you pre-empt problems with parents on your property?
In the case of renovations, a written agreement, drawn up by a lawyer, is recommended.
The contract has to stipulate how the payment of electricity, water and other services, property taxes, property insurance and property upkeep will be settled. It also needs to include a formula to determine the value of the renovations – and how it will be settled – when the inhabitants move out, or pass away.
It should also stipulate the exact consequences for the heirs.
One option is that the daughter offers to take care of her parents, in exchange for a reduction in the value of the renovations.
Right of occupation and preferably the mortgage have to be registered in the parents' names. This places some restrictions on the owners of the main property.
Parents and children usually want to avoid written agreements, but permanent renovations to another's property usually holds a number of risks, says Van Blerk.
- Sake24
For business news in Afrikaans, go to www.sake24.com.
