3 Facts About Common Law Property Rights in Ontario

In today’s day and age, not all long term couples go the traditional route of getting married. After all, when you’re in a long term relationship and you cohabitate, everyday life can already feel fairly similar to marriage.

That being said, there is a big difference between being married and being in a common law relationship. Especially when it comes to property rights.

Whether you’re about to buy a house with a common law partner or are currently navigating a separation, there are important laws to be aware of regarding common law rights to property.

In this blog, we’ll look at a few essential facts about common law property rights in Ontario that you need to know.

Searching for information on divorce and real estate? Find out who gets the house in a divorce.

A Quick Disclaimer

As real estate agents, we often work with families who are navigating a divorce or separation. Because of this, we are well-versed in a number of aspects of property rights as they pertain to the home.

This article is designed to provide high level information about Ontario common law property rights as they apply to selling a house in the event of a separation. However, if you are searching for formal legal advice or more personalized guidance regarding your rights, it’s a good idea to consult a lawyer.

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Searching for more divorce-related real estate resources? Explore these related blogs next.

• How Long Will It Take to Buy Out Your Spouse After a Divorce?
• Selling After a Divorce: Do You Need One Agent or Two?

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What is a Common Law Partner?

Unlike marriage, which usually involves a big ceremony (or at the very least, the signing of a few documents), entering into a common law partnership is far less formal. In fact, there are plenty of common law couples out there who may not even realize that they fit the bill.

Legally speaking, there are a few parameters that define a common law partnership, they are:

• Partners who are in a conjugal, non-platonic relationship and have lived together for a minimum of 3 continuous years.
• Partners who have a child (or children) together and are in a relationship of permanence.

3 Facts About Common Law Property Rights in Ontario

In practice, being in a long term, common law relationship can feel very similar to a marriage. However, in the eyes of the law, they’re two very different types of partnerships. As a result, each type comes with its own financial and legal implications.

Understanding common law rights is particularly important in the event of a separation, as the legal nuances will impact who is entitled to shared assets – including the home.

Let’s break down 3 essential facts about common law property rights.

1 – Common Law Partners Don’t Have Automatic Rights to Property

In Ontario, both spouses automatically acquire equal rights to the matrimonial home when they get legally married. This means that, in the event of a divorce, both parties have an equal claim to the house itself. As well as any appreciation in its value (equity). However, common law partners in Ontario aren’t granted the same guarantee.

As real estate agents, one question we occasionally hear is, “Is my common law partner entitled to half my house?” The answer is (usually) no.

Unlike marriage, there are no automatic rights to property when common law spouses separate. If one partner owned the home independently before the other moved in, they will remain the sole homeowner unless they formally add the other to the mortgage or title.

2 – Common Law Partners Can Make a Claim to Parts of a Property or its Value

While common law partners aren’t naturally granted property rights, they can make certain claims in the event of a separation.

For instance, if one person made substantial financial contributions towards the mortgage or home renovations, the court may rule that it would be unfair for them to be refused a share of the home’s equity even if it’s not in their name.

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Moving to a new home following a separation? Explore these blogs for advice on buying a home.

• Do You Need to Include Conditions in Your Buying Offer?
• How to Budget for Buying a Home in Vaughan
• 5 Reasons You Should Get a Mortgage Pre-Approval Before Heading to the Market

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3 – Common Law Partners Can Inherit Property if They’re Named in a Will

Another instance in which a common law partner may be entitled to some (or all) of a home and its equity is through inheritance. Should one partner pass away, the other may inherit the home if they are properly designated in the deceased’s Will.

What Else is a Common Law Spouse Entitled to in Ontario?

When it comes to common law spouse entitlement, certain rights go beyond the realm of real estate. For example, common law partners may be entitled to various types of financial support, such as spousal or child support, depending on the circumstances.

Buying a House With a Common Law Partner

Finally, if you’re planning on buying a house with your common law partner, you can take steps to protect yourself and your investment. Similar to a prenuptial agreement, a cohabitation agreement is a legally binding document that outlines each partner’s rights and responsibilities related to the home. With a cohabitation agreement in place, both partners should have some form of security in the event of a separation.

Looking to buy or sell following a divorce or separation? We can help! Email our team at info@arciteam.com or call 416-571-2724.