Dilemma: Money lent to relatives for a house deposit but…

Nybster

So I just need to ‘suck it up’…

favours are already far, far fewer!!

Pollycat

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

You've explained what you and your wife's expectations were for the money.

What was your cousin's expectation?
Did your wife tell them that it was a gift? 
If she did, no wonder they've not paid it back.

You didn't exactly represent the situation accurately in your original post. 
Most posters thought it was a straight forward loan to be replaced.

Nybster

Pollycat said:

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

You've explained what you and your wife's expectations were for the money.

What was your cousin's expectation?
Did your wife tell them that it was a gift? 
If she did, no wonder they've not paid it back.

You didn't exactly represent the situation accurately in your original post. 
Most posters thought it was a straight forward loan to be replaced.

Maybe not, but it was a long post and I updated further relevant info when able (for some reason I don’t seem to be able to edit posts). 

In answer to your questions, the discussion went;

how much more do you need for a deposit to buy next door?

£15,000

we can give you that…

thank you so much, we’ll pay you back…

sale never happens…

we meant it as a gift, they saw it as a loan to help them get the house they so badly wanted…

but, this seems to have run its course…

“Giver beware”

_Penny_Dreadful

Whose cousin is it, yours or your wife’s? If the cousin is on your wife’s side of the family I’d leave it. However, if it’s your cousin then you could have a word with them about the loan. I wouldn’t expect to see the money back though. 

Pollycat

Nybster said:

Pollycat said:

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

You've explained what you and your wife's expectations were for the money.

What was your cousin's expectation?
Did your wife tell them that it was a gift? 
If she did, no wonder they've not paid it back.

You didn't exactly represent the situation accurately in your original post. 
Most posters thought it was a straight forward loan to be replaced.

Maybe not, but it was a long post and I updated further relevant info when able (for some reason I don’t seem to be able to edit posts). 

In answer to your questions, the discussion went;

how much more do you need for a deposit to buy next door?

£15,000

we can give you that…

thank you so much, we’ll pay you back…

sale never happens…

we meant it as a gift, they saw it as a loan to help them get the house they so badly wanted…

but, this seems to have run its course…

“Giver beware”

I think this arrangement was very ambiguous.
You both told them it was a gift.

You meant it as a gift, they seem to have accepted it as a gift when their house purchase fell through and are spending/have spent the money.

Giver should be more precise when loaning/gifting money.

saajan_12

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

OK this is very different from the OP.. I think most peoples' interpretation of "informal" was not written down and no precise date & time for repayment with specific penalities, but still with a clear expectation of repayment based on some broad event. 

If you gifted them a deposit, they bought a house, and then x time later they sell / up the mortgage and have fun with the money, then would you still have an issue? The point you need to decide with the wife is whether you want to treat it as a loan or a gift. If its a loan, then the money comes back. If its a gift, then you don't get to tell them what to do with it. 

silvercar

saajan_12 said:

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to  give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

OK this is very different from the OP.. I think most peoples' interpretation of "informal" was not written down and no precise date & time for repayment with specific penalities, but still with a clear expectation of repayment based on some broad event. 

If you gifted them a deposit, they bought a house, and then x time later they sell / up the mortgage and have fun with the money, then would you still have an issue? The point you need to decide with the wife is whether you want to treat it as a loan or a gift. If its a loan, then the money comes back. If its a gift, then you don't get to tell them what to do with it. 

Don't agree with your last sentence. You can gift family money for a particular purpose, then it is gift with the condition it is used that way. I gifted my offspring money for deposit on a house, the gift was conditional on it being used that way. 

Keep_pedalling

silvercar said:

saajan_12 said:

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to  give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

OK this is very different from the OP.. I think most peoples' interpretation of "informal" was not written down and no precise date & time for repayment with specific penalities, but still with a clear expectation of repayment based on some broad event. 

If you gifted them a deposit, they bought a house, and then x time later they sell / up the mortgage and have fun with the money, then would you still have an issue? The point you need to decide with the wife is whether you want to treat it as a loan or a gift. If its a loan, then the money comes back. If its a gift, then you don't get to tell them what to do with it. 

Don't agree with your last sentence. You can gift family money for a particular purpose, then it is gift with the condition it is used that way. I gifted my offspring money for deposit on a house, the gift was conditional on it being used that way. 

How exactly would you enforce that if they had done something else with it? Gifts are absolute, once given you no longer have control. I suppose you could alter you will to cut them out of it but there is nothing you can do to get it back if they refuse to give it back.

oldernonethewiser

silvercar said:

saajan_12 said:

Nybster said:

So, this is where I think the differences between me and my wife lie. We had always just intended to  give them the money towards their deposit. Their insistence, at the time, to pay it back is where my ‘Informal’ loan description comes from (my wife still insists it was a gift). My gripe is that, even if it was a gift, it was for a house purchase which hasn’t materialised…

OK this is very different from the OP.. I think most peoples' interpretation of "informal" was not written down and no precise date & time for repayment with specific penalities, but still with a clear expectation of repayment based on some broad event. 

If you gifted them a deposit, they bought a house, and then x time later they sell / up the mortgage and have fun with the money, then would you still have an issue? The point you need to decide with the wife is whether you want to treat it as a loan or a gift. If its a loan, then the money comes back. If its a gift, then you don't get to tell them what to do with it. 

Don't agree with your last sentence. You can gift family money for a particular purpose, then it is gift with the condition it is used that way. I gifted my offspring money for deposit on a house, the gift was conditional on it being used that way. 

As already asked, how did you enforce this condition and if the family member had chosen to buy something else what would you have been able to do?

sheramber

Only hand over the money at the relevant time.
No purchase, no money.