Common-Law Couples and Buying a Home: Who Owns What in Ontario?

Buying a home together is a big step, and many unmarried couples assume the law will treat them like a married couple if things go wrong. In Ontario, that assumption can be costly.

This article explains how ownership generally works for common-law partners who buy a home, how contribution claims arise, and what you can put in place before closing. It is general information, and your own facts may change the result.

Why marriage and common-law are treated differently

The family property rules in Part I of the Family Law Act apply to spouses who are married to each other. Unmarried partners are not spouses for property equalization.

Ontario's guidance says common-law couples are not legally required to split property acquired while living together. Furniture and household items belong to the person who bought them, and there is no right to split the increase in value of property brought into the relationship. That makes the paperwork you sign when buying much more important.

How you take title

When land is conveyed to two or more people, the law treats them as tenants in common and not joint tenants unless the document shows otherwise. This applies even if one of them is the spouse of another. So if you want survivorship, the transfer needs to say so.

A separate article covers this choice in more detail. The key point here is that title answers who is on the deed, but it may not answer every question about who contributed what.

Contribution claims when only one name is on title

Sometimes one partner is on title and the other pays toward the mortgage, renovations or the down payment. Ontario's guidance says if you contributed to property your partner owns, you may have a right to part of it. Unless your partner agrees to pay you back, you may have to go to court to recover your contribution.

The Supreme Court of Canada has confirmed that unmarried partners can claim unjust enrichment. Where there is a joint family venture, the remedy is a proportionate share of the wealth accumulated, linked to contributions. There is no presumption of a joint family venture, and the parties' intent and conduct weigh heavily.

Timing matters. The basic limitation period is two years from the day a claim was discovered, with a 15-year ultimate limitation period, and this applies to non-support claims such as unjust enrichment between former partners. When a claim is discovered is fact-specific, so get advice early rather than waiting.

How gifts or inheritances used toward a home are treated in a common-law claim depends on the evidence of contribution and intent, so it is worth keeping records and speaking to a lawyer.

Putting your intentions in writing

Two people who are cohabiting or intend to cohabit, and who are not married, may enter a cohabitation agreement. It can cover rights and obligations during cohabitation, on ceasing to cohabit or on death, including ownership and division of property and support. If you later marry each other, the agreement is deemed a marriage contract.

• It must be in writing, signed by both partners and witnessed, or it is unenforceable.
• Each partner should use a different lawyer and exchange financial information.
• It cannot decide decision-making responsibility or parenting time for children.
• A court may set it aside if a party failed to disclose significant assets, debts or liabilities, did not understand its nature or consequences, or on other contract-law grounds.

A well-drafted agreement can record who paid what toward the purchase, how the home would be sold or bought out, and how renovations are treated. Whether a particular clause will hold up depends on the facts and a lawyer can confirm.

Mortgages, separation and next steps

The Financial Consumer Agency of Canada says a joint borrower on a mortgage, loan or line of credit becomes equally responsible for repaying the unpaid balance. How this fits with each partner's ownership share depends on your situation, so it is worth confirming with a lawyer.

If you separate and cannot agree to sell or buy out, any person interested in land in Ontario may bring an action or application for partition, and the court may order a sale instead if that is more advantageous to the parties.

• Decide before closing whether you will hold title jointly or as tenants in common, and make sure the transfer says so.
• Keep records of who paid the down payment, mortgage payments and renovation costs.
• Consider a cohabitation agreement, with separate lawyers and full financial disclosure.
• Review your wills, since an unmarried partner has no automatic share of an estate.
• Ask a lawyer how a buyout, refinancing or lender release would work if you separated.

Frequently asked questions