A relative buying the property, with you staying or renting it back, is a real option that genuinely works for some households. It also has failure modes that are worse than losing a house, because they take a relationship with them.
Where it works
When the relative can genuinely afford it — qualifying for the financing on their own merits, with the payments comfortably within their means, not at a stretch.
When the price is fair and documented. When everyone's expectations are written down. When both sides have their own independent legal advice.
Where it goes wrong
The buyer cannot really afford it. Family members overextend to help, and then two households are in trouble instead of one.
Expectations were never written down. "You can stay as long as you like" and "buy it back when you are on your feet" mean different things to different people, particularly two years later when circumstances have changed.
Nobody discussed what happens if things change. If the buyer divorces, dies, needs to sell, or falls out with you — what then? These are uncomfortable conversations and skipping them is how families end up in court.
The price was not arm's length. A sale well below market can raise questions, including tax questions and, where other creditors are involved, questions about the transfer itself. Get proper advice before pricing it as a favour.
The practical requirements
Independent legal advice for both sides — genuinely both, not a shared lawyer. A written agreement covering the sale, any tenancy, and any option to buy back, with the terms spelled out rather than implied. And a documented, defensible price.
Speak to an accountant too. There can be tax consequences on both sides that are easier to plan for than to discover afterwards.
The conversation to have first
Before any of it: can they afford this if things go badly for a year? If the answer is anything other than a clear yes, it is not a rescue — it is spreading the problem.
And if it does not work out, is this relationship strong enough to survive it? Sometimes the honest answer is that an ordinary sale on the open market, with everyone's relationships intact, is the better outcome.
Questions people ask
General information about the Alberta foreclosure process — not legal or financial advice, and nothing here guarantees an outcome. Every file is different.