Your niece/nephew asked you for a loan to buy a home. As a supportive aunt/uncle, you said yes and gave your niece/nephew a $100,000 cheque for the down payment.

You did not sign a loan agreement because you trusted your niece/nephew. 1 year later, you had a falling-out with your niece/nephew. They now refuse to repay the loan and say the $100,000 was a gift.

Unfortunately, this type of dispute happens far more often than most people think.

Without a loan agreement, you are leaving it up to the Court to decide:

  • whether the money advanced was a gift or a loan; and
  • the terms of the loan, such as the repayment date.

A Recent Case: Maclure v. Teeuwen, 2026 ONSC 3168

I successfully represented a client at trial concerning a verbal family loan.

In 2018, my client advanced funds to his niece for a house purchase. The parties did not sign any written loan agreement or promissory note. The parties disagreed on the repayment date.

The case therefore turned on what the term of the loan was. The trial judge found that no date for payment was ever agreed upon. The loan was repayable on demand by operation of law.

The trial judge granted judgment in favour of my client because he demanded repayment.

Takeaways: How to Protect Yourself

Before advancing any money, you should insist on the borrower signing one of these two documents to avoid any ambiguity:

  1. A loan agreement with crystal-clear terms on (i) the amount borrowed, (ii) the interest rate, and (iii) the repayment date; or
  2. A promissory note making it a formal “I owe you”.

If you are facing issues with collecting an unpaid loan, please feel free to contact us for guidance.



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