Reference no: EM133394526

Case Study: Mohammad and Bahija, a young couple, had purchased their dream home on a lovely street in an area of Toronto. It was in a newly developed neighbourhood with a great price of $950,000. The young couple decided that they would get funding from a bank through a mortgage but required a down payment. They thought about where they could get the down payment and decided to ask their friends, Dakotah and Amal, who were close friends that had come into some significant money when they sold their tech business a few years ago.

Dakotah and Amal gave the down payment of $190,000 to Mohammad and Bahija with a verbal agreement to pay it back over five years.

As the years went on, Mohammad and Bahija made their mortgage payments but they had not paid back any of the money borrowed from Dakotah and Amal. Dakotah and Amal had made numerous requests to Mohammad and Bahija and, after two years of non-payment, they asked Mohammad and Bahija to develop a payment schedule to make repayment more manageable. Mohammad and Bahija ignored all requests.

Question: Dakotah and Amal were not sure what to do. This process put a serious strain on the friendship. At this point, they knew they couldn't go to small claims court because of the amount they were claiming. Further, Dakotah and Amal are at a point in their lives where their children will be going to college soon and they had also purchased a summer home and didn't have the additional money to get involved in a lawsuit. What would you suggest Dakotah and Amal do and why?