The Meeting Place

Granny flat arrangement

I am really interested in people's points of view on this issue as to what you believe is a fair arrangement. I care about the people involved and want to make sure that nobody is taken advantage of, and that a fair result is achieved.

A friend (in their 70s), whom I will call 'Mary' just to make it easier for my post, is planning to sell their house, after her husband recently passed away, and move into a granny flat at a property owned by their child Bob, and Bob's partner and child. Initially this is for around 12 months but may be longer term. Mary will be selling her house but probably won't get much for it, and is not exactly flush with money. Part of the reason for doing this is that Mary will be taking care of Bob's child in the mornings for him before school, and will pick the child up from school and look after them until Bob and partner come home from work (I believe Bob and partner both work roughly business hours). There is no formal plan of more childcare than that, but past history suggests it is likely that Mary will be asked to look after the child fairly regularly if Bob and partner go out as well. I don't believe there is to be housework involved, but I think it's likely in the course of looking after the infant-schooler Mary will wind up doing bits here and there. 

Mary will be moving to this flat from out of town, and is still very active etc and will definitely want to get involved in a few things for herself when she moves residence. She currently volunteers sometimes, and works very occasionally. Needing to be available for her grandchild's childcare before 9 and after 2:30 on weekdays will obviously have an impact on what she can plan for herself.

With all the above taken into consideration, what do you believe would be an acceptable arrangement financially in this situation? Should any money be changing hands (Bob getting paid rent, or Mary being paid for childcare etc), and if so, how much and to whom? Should there be any other kinds of benefits (meals, electricity bills included etc)? Mary will have her own car.

How do you believe they should set things up so that it is fair for all involved, and nobody is being taken advantage of, and obviously also recognises that this is family, not strangers, making this agreement?

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No most definitely NO, Mary would be at the whim of the Son and his Partner -- and if they move out then what happens to Mary -- I would suggest she stays where she is and gets on with her life seeing that she is still active -- there is nothing like being fully independent and stay so as long as you can

I once contemplated buying a duplex property and living in one while my then unmarried (and renting) son lived in the other.  Both our circumstances have now changed, both of us with partners, and both of us with our own houses in the same city around 15 or 20 minutes apart.  Works for us. 

I still think the duplex idea was workable, at least while we were both 'single', but like I said circumstances can and do change. Bringing partners into the mix, no matter how well loved they might be changes the landscape completely.

Having said that I have seen one similar arrangement work very well. A mother and son I knew had adjoining houses but on separate blocks. They were literally next door neighbours. That son was married with children and his mother helped out but not excessively.

I wonder if Bob's property is large enough to maybe divide and Mary could build a tiny house 'next door'.  :)  Just gauging his reaction to such a suggestion might be an eye opener lol.  Just kidding .... I think. :)

In my opinion it would be foolhardy for anyone in their seventies to contemplate doing this. I may be totally wrong but on the surface Bob and his partner see a good opportunity for themselves, never mind the toll it could have on the mother. If I were Mary, I would stay in my own home and enjoy all her normal activities, take up new hobbies and avoid stress. 

Thank you everyone for your posts on this issue. You have been very helpful and really raised some very good discussion points!

Thank you everyone for your posts on this issue. You have been very helpful and really raised some very good discussion points!

Hi Breeze,

What have you decided to do?

Hi LJ,

I think everyone has confirmed in their posts what we already suspected - it is not a fair deal at all for Mary. As to what to do- well that obviously gets tricky. Ultimately all involved are adults and it is going to be up to them but my husband is now informed enough to provide support to Mary should she need it in negotiating a decent equitable deal before making any permanent moves. Ideally Bob will have a rethink before this was all to take place and make a much fairer offer and we wouldn't need to say anything but we'll see what happens!

Hi LJ,

I think everyone has confirmed in their posts what we already suspected - it is not a fair deal at all for Mary. As to what to do- well that obviously gets tricky. Ultimately all involved are adults and it is going to be up to them but my husband is now informed enough to provide support to Mary should she need it in negotiating a decent equitable deal before making any permanent moves. Ideally Bob will have a rethink before this was all to take place and make a much fairer offer and we wouldn't need to say anything but we'll see what happens!

There is nothing to suggest that Mary hasn't been anything but able and thrifty in the management of her affairs to date, or that she is presently incapable of making her own decisions.  

Regarding Bob and his wife, it is very kind and responsible of them to help out, especially where they have a young child.

The disposal of Mary's house seems to be a concern.  We are lucky to be able to stretch nest eggs for any distance into old age.  In the country the costs of living are higher than many imagine and the access to care is limited.  Maintaining a property is very expensive due to the higher cost of trades.  As well, without the sale, Mary might not live her final days in the bosom of family and close to her grandchild.  

They can all work it out can't they?  So stop worrying - which leaves room for you to figure ways your husband and you can enjoy better contact too.  Maybe some quality time with you for variety :)

It is so wonderful to have that closeness with a grandchild. We turned our world upside down for one of ours 15 years ago and have not regretted it. Family is everything!

Maybe, no money needs to change hands. Mary can have free rent in return for childminding which is better with family involved. We did it for nothing for years. 

Food will sort itself. Some meals will be shared and privacy for all will happen. 

Some people do not know the value of family and the joy Mary will get from the child is beyond price.

The child is not a baby so time will pass quickly but will secure a closeness between grandma and grandchild that is priceless. 

Thanks Paddington for your alternate point of view. I am interested in all replies, and was hoping to get as wide a range of responses as possible. 

LJ - I haven't suggested at any point that Mary shouldn't do it. We definitely appreciate there are some benefits to Mary, like a smaller house to maintain, and better access to care. I think regardless of whether this situation had presented itself Mary was always going to sell up and move. The proposed arrangements though just need to be a situation that is fair, and as the majority of other posters have suggested - this isn't fair for Mary. Kindness aside - there is far too much in this situation for Bob to gain, and Mary to lose by. I assume that you wouldn't knowingly let a loved one get themselves into a bad situation, and that regardless of whether someone usually operates in an 'able and thrify manner' making good decisions, that in times of major stress it is not a bad thing to have loved ones watching out for them to make sure that they are still making their usual good decisions. This post was part of us becoming informed enough to be able to give informed, considered responses when asked our opinion. 

Thanks everyone for your input! Much appreciated!

Thanks Paddington for your alternate point of view. I am interested in all replies, and was hoping to get as wide a range of responses as possible. 

LJ - I haven't suggested at any point that Mary shouldn't do it. We definitely appreciate there are some benefits to Mary, like a smaller house to maintain, and better access to care. I think regardless of whether this situation had presented itself Mary was always going to sell up and move. The proposed arrangements though just need to be a situation that is fair, and as the majority of other posters have suggested - this isn't fair for Mary. Kindness aside - there is far too much in this situation for Bob to gain, and Mary to lose by. I assume that you wouldn't knowingly let a loved one get themselves into a bad situation, and that regardless of whether someone usually operates in an 'able and thrify manner' making good decisions, that in times of major stress it is not a bad thing to have loved ones watching out for them to make sure that they are still making their usual good decisions. This post was part of us becoming informed enough to be able to give informed, considered responses when asked our opinion. 

Thanks everyone for your input! Much appreciated!

Just a thought Breeze

Would the money that Mary gains from the sale of her house cause her to loose her potential pension ?

Hi Suze. We believe that as long as Mary buys another property within 12 months that her pension shouldn’t be too affected? If anyone knows any different though please let me know! 

Breeze,

Mary needs to peg the price of her housing by buying soon, not later.  It can take time to find a property, to close the deal and for it to become available for occupancy.  As well, she needs the settlement in hand from her own property before committing to any other. Older people will find great difficulty in getting housing loans.  To be blunt, she needs the full amount plus legals, adjustments and allowance for any modifications (eg to wet areas, stairs) to suit. 

It is going to be tight and a spreadsheet of steps, timings and outlays would help.  The existence of the plan would also lay to rest some doubts about the future.

If the rent for her stay at Bob's is to be at market rates or near to it, then the childminding should similarly be at the economic charging rate for such work, with some reduction because she is not accredited.  Commonsense should find a mutually satisfactory arrangement, (say) $0 pw - break even, or a peppercorn either way.  There seems to be the expectation of rent assistance from Centrelink.

I don't regard meals being provided as any real benefit because it just makes the work day longer and it is probably only there to 'prove' a lodging/boarding arrangement.  There could be the expectation that the childcare or other support role continues for the duration of it, or that she should be doing chores.

If I was Mary I'd pay for an hour or so with a local accountant and get some numbers worked out, along with an agreement for periodic tenancy or boarding agreement.  

Where the accommodation is not separate with its own facilities there may have to be a boarding agreement.  

I liked toot2000's reply.

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