"You Are My Tenant": When a Family Promise About a House Can't Be Proved

Families help each other out, especially when money is tight. A relative steps in, buys the house so the bank can’t take it, and everyone understands or thinks they understand that the arrangement is temporary and that the family will get the home back one day. Years pass. Nothing is written down. And then the relationship sours, and what everyone “understood” turns out to mean very different things to different people.

A recent decision of the Supreme Court of New South Wales, Grawi v Stanbouli [2026] NSWSC 300, is a textbook example of how badly these informal property arrangements can end. It is also a useful reminder of two things: that an undocumented “we’ll hold it for you” promise is extraordinarily hard to enforce and that the right place to fight about a residential tenancy is usually the Tribunal, not the Supreme Court.

The register, and the limits of unwritten promises

In New South Wales, land ownership is recorded on the Torrens register under the Real Property Act 1900 (NSW). As a general rule, the person named on the title is the legal owner. Equity will sometimes look behind the register, for example, where a “common intention constructive trust” arises because the parties genuinely shared an intention that one of them would hold the property for the benefit of another and someone acted on that intention to their detriment. But the person asserting such a trust carries the burden of proving it.

That is much easier said than done. Courts are well aware that memories of conversations from many years ago are unreliable and tend to be reconstructed, consciously or not, to suit a person’s current interests. When someone tries to prove an oral agreement made long ago, the Court scrutinises the claim carefully and looks hard at the contemporaneous documents and conduct to see whether they fit the story. And where the allegation is a serious one, in effect, that a family member secretly took a property they had promised to hold on trust the evidence needed to persuade the Court is correspondingly stronger.

The facts: a house, a bankruptcy, and a brother-in-law

Nabil and Rajaa Grawi, a married couple, had owned a home in South Granville in western Sydney since 2001, mortgaged to Arab Bank. By 2008–2009 the businesses Mr Grawi ran had collapsed, he had defaulted on the mortgage, and in February 2009 he filed for bankruptcy. At that point his share of the home vested in his trustee in bankruptcy, and the couple feared the bank would take possession and sell.

In October 2009, the Property was sold for $400,000 to Mr Grawi’s brother-in-law, Ahmad Stanbouli (who had married Mr Grawi’s sister). The sale price was enough to discharge the Arab Bank mortgage, and Mr Stanbouli paid the stamp duty. He became the registered proprietor. Days later, Mr Grawi and Mr Stanbouli signed a six-month residential lease at $425 per week. No bond was paid. The Grawis stayed living in the home and made regular payments to Mr Stanbouli for the next fourteen years, payments that rose over time from $850 a fortnight to $1,000 and eventually $1,100 and which, by September 2024 totalled around $353,596.

That is where the two versions of events diverge sharply. The Grawis said that, before the sale, the family had a conversation in the dining room of the house – the “Pivotal Conversation" – in which Mr Stanbouli agreed to buy the Property and hold it for them until they could afford to buy it back. On their account, the lease was a sham document created only to show Mr Stanbouli’s bank, and the payments they made were really mortgage instalments, not rent. From that alleged agreement, they said, a common intention constructive trust arose, giving them a beneficial interest in the home.

Mr Stanbouli’s account was very different and much simpler. He denied the Pivotal Conversation ever happened. He said he bought his relatives’ home as an ordinary investment on his accountant’s advice, rented it back to them, and had charged and received rent ever since. He had declared the payments as rental income to the ATO for years.

Things came to a head in 2023, when Mr Stanbouli decided the rent was below market and told the Grawis to leave. In January 2024 he served a formal notice terminating the lease and demanding rental arrears, and in July 2024 he applied to the NSW Civil and Administrative Tribunal (NCAT) for a termination and possession order. Only in August 2024 for the first time did the Grawis lodge a caveat over the title claiming an equitable interest under a constructive trust. Because NCAT cannot determine a trust claim of that kind, the parties agreed to move the whole dispute to the Supreme Court.

The issues before the Court

The case turned on several questions. The central one was factual: did the Pivotal Conversation actually take place so that the alleged agreement (and the trust said to flow from it) existed at all? Beyond that, the Court had to consider whether the Grawis could even have entered into such an arrangement while bankrupt, Mr Grawi’s interest in the home had vested in his trustee in bankruptcy and whether the trustee’s consent would have been needed. Mr Stanbouli also argued that the long delay in asserting any trust (no claim until 2024) was itself a bar to equitable relief. Finally, there was a separate, more technical question: now that the tenancy dispute had been moved up to the Supreme Court, did that Court even have power to terminate the lease and order possession?

The arguments and the Court’s decision

The Grawis relied on the alleged conversation and on conduct they said was consistent with it. Mr Stanbouli pointed to the documents and conduct that fit an ordinary landlord-and-tenant relationship: a signed and witnessed lease, payments he treated and declared as rent for over a decade, rent increases he requested from time to time, and the fact that the Grawis never asserted any ownership interest or lodged a caveat until he tried to evict them in 2024. There was also evidence that a copy of the lease had likely been provided to Centrelink in support of the Grawis’ own applications for assistance – difficult to reconcile with their claim that the lease was a meaningless sham.

The Court was not satisfied that the alleged oral agreement had been proved. As a question of fact, the Grawis bore the onus of establishing the Pivotal Conversation and the agreement said to flow from it, and they did not discharge it. Without that agreement, there was no common intention and no constructive trust and so no beneficial interest in the property. The register stood: Mr Stanbouli owned the home both legally and beneficially. (The judgment records that the case raised “no issue of principle” it simply turned on the evidence.)

On the tenancy question, the Court held that, even though the dispute had been transferred up from NCAT by consent, the Supreme Court had no power to make an order terminating a residential tenancy and granting possession under the Residential Tenancies Act 2010 (NSW). That jurisdiction belongs to NCAT, and the tenancy issues were remitted there to be dealt with in the proper forum.

The lessons for property owners and families

This was a dispute with no documents to support the very arrangement the whole case depended on which is exactly why it failed. A few practical lessons stand out.

If it isn’t written down, you may not be able to prove it. The Grawis’ entire claim rested on a single conversation from 2009. Fourteen years later, with no contemporaneous record and a signed lease pointing the other way, that was never going to be enough. Any arrangement where one person holds property for another, whether for family, asset-protection or any other reason, must be recorded in a properly drafted, signed document at the time.

The paper trail you create will be used to interpret your intentions. A signed lease, payments declared as rent, rent increases, and a tenancy document handed to Centrelink all told a consistent story, and it was not the Grawis’ story. You cannot sign documents that say one thing and later insist everyone “really” meant something else.

Arrangements made under financial pressure are especially risky. Transferring or “parking” a home with a relative when bankruptcy or a mortgagee sale looms raises serious complications. A bankrupt’s interest in property vests in the trustee, and dealings without the trustee’s involvement can be ineffective or worse. Get advice before, not after.

Assert your interest promptly. Waiting until you are about to be evicted to claim an ownership interest and only then lodging a caveat undermines the claim and can give rise to arguments that you have left it too late.

Bring your dispute in the right forum. Residential tenancy terminations and possession orders are for NCAT, not the Supreme Court. Starting in the wrong place wastes time and money.