Lending money to family
When it comes to lending money to family, you'd better go after the money within two years or kiss it goodbye forever.
Why are mortgages so expensive in Canada?
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Q: In 1991, I loaned my brother $1,300. We signed a piece of paper agreeing that he would repay the principal in one year’s time plus 6% interest. Since then, he never once has mentioned the loan, nor has he repaid one cent. Legally, can I get what I’m owed?
—Peeved Brother, OTTAWA
A: Sorry, but as far as the law is concerned that ship sailed long ago. This type of contract, in which a person agrees in writing to pay a determined sum of money to the other person (the payee) at a fixed future date and time, is known as a “promissory note,” says Toronto lawyer Barry Fish. “But the statute of limitations says he’s got to sue within two years of the date of that fixed term, and that would have been back in the early ’90s.” Barring any appeal to encourage your brother to honour the loan, it’s probably best to move on and accept that money lent to family members isn’t always repaid—sometimes at the cost of the relationship.
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