Common-Law Property Rights in Ontario Without an Agreement

Many people assume that after a few years together, everything is shared half and half. In Ontario, that assumption is often wrong for unmarried couples, and it can come as a hard surprise at a breakup.

This article explains how property is treated when common-law partners separate without a cohabitation agreement, and how a claim based on contribution, often called unjust enrichment, works in general terms. It is general information, not advice on your case.

Equalization is for married spouses

Equalization applies to married spouses: property acquired during a marriage must be split equally when the marriage ends for any reason, and courts can divide differently only in very special situations.

The calculation subtracts debts and excluded property from the property owned on separation, then does the same for the date of marriage. A negative result counts as zero, and the larger share minus the smaller share, divided by two, is the equalization payment.

That formula is built around a marriage date and a separation date. It is the married-spouse system, and it does not automatically apply to a partner you have never married.

The default rule for common-law couples

Common-law couples are not legally required to split property acquired while living together. Household items and other property belong to the person who bought them, and they do not share in the increase in value of property brought into the relationship.

How ownership works for a particular item depends on the facts, so it is worth confirming with a lawyer. That can feel unfair to the partner who did unpaid work, paid household bills or helped renovate.

Whether two people count as cohabiting can matter for some purposes. For Family Law Act purposes, to cohabit means to live together in a conjugal relationship, whether within or outside marriage, and there needs to be some element of living together under the same roof.

Claims based on contribution

Having no right to equalization does not always mean leaving with nothing. A common-law partner who contributed to property the other spouse owns may have a right to part of it. Unless the other spouse agrees to repay the contribution, the claimant may have to go to court.

One claim between unmarried partners is unjust enrichment. In an Ontario Court of Appeal decision between unmarried partners, the court asked whether the defendant was enriched and the claimant suffered a corresponding deprivation, and whether there is no reason in law or justice for the defendant to keep the benefit. The claimant has the onus of proof.

• Enrichment: did the other partner gain something, such as a higher-value home?
• Corresponding deprivation: did you lose something, such as money or work you put in?
• No reason to keep the benefit: is there no legal or fair reason the other person should keep it?
• Burden of proof: you, as the claimant, must prove it

Joint family venture and the remedy

Once unjust enrichment is established, the question becomes what remedy fits. Ontario courts apply joint family venture factors on remedy: mutual effort, economic integration, actual intent, and priority of the family in decision making. The concept comes into play only once unjust enrichment is established.

In plain terms, a court looks at whether you built your lives and finances together as one family unit. How it works out depends heavily on the evidence in each case, so outcomes are hard to predict.

Strong records help. Bank statements, receipts, emails and texts about who paid for what and why can matter far more than memory.

What to do next

If you are separating, or about to move in with someone, a few steps can protect your position. A family lawyer can tell you how these rules apply to your facts, including time limits for any claim, which depend on the type of claim.

• Gather records of who paid for the home, renovations, mortgage and major purchases
• Note what you each owned when the relationship began
• Save messages and documents showing what you each agreed or intended
• Avoid assuming that half of everything is yours or theirs
• Ask a lawyer whether a claim is worth pursuing and what time limit applies to it
• If you are not yet separated, consider a cohabitation agreement to set your own terms

Many couples can settle these questions by agreement. Where they cannot, a court may need to decide.

Frequently asked questions