A guide to home ownership for unmarried couples


Buying a home is one of the biggest investment decision that one takes during his or her lifetime and if you are one of the unmarried couples to buy a home, you should do so with some precautions to make sure your interests in the property are protected.

Under Family Law Act in Ontario, both spouses have an equal right to possession of a matrimonial home. The Act confirms the rights of the non-owner spouse to equal possession of a matrimonial home. This right is a personal one and is not an interest in land. The Act further provides that the spouse has the right to be notified of any proceedings by a third party that could affect
that possessory right. The registered owner cannot dispose of, or encumber, the matrimonial home without the consent of the other spouse. Property law in Ontario for Married couples which call for the equal division of property on marriage breakdown or death.

As per data by Statistics Canada, the number of common-law couples in Canada rose 13.9 percent between 2006 and 2011. In 2016, over one-fifth of all couples (21.3%) were living common law, more than three times the share in 1981 (6.3%). In the USA, 1 in 4 homeowners said they purchased a home with their significant other before marriage, according to a 2016 survey by TD Bank. While Family Law act provides adequate protection to each partner, it is not the same as with unmarried couples and they do not have any automatic right to property like married couples. Purchasing a home together means that you can do so as joint tenants, or tenants-in-common. In joint tenancy, the interest of a joint tenant passes immediately upon the death of that individual to the other tenant(s). In Ontario, two people are considered common law after they’ve lived together for at least three years, but less if there is a child. Common-law partners can claim spousal support but not property, unless there is a cohabitation agreement in place.

Common-law couples are more likely to break up – Of the 2 million Canadians who went through a breakup between 2001 and 2006, approximately half were ending a marriage and the other half were dissolving a common-law relationship. This was despite the fact that there were far fewer common-law couples than married couples in 2001. Stats Canada

Create a homebuying prenup

A prenup is a legally binding financial agreement between unmarried couples who are planning to get married in the future. In Ontario, if you are getting married or already married, a prenup is called a marriage contract. If you and your partner are living together in a common law relationship, a prenup is called a cohabitation agreement. Together, these two types of agreement, along with separation agreements, are called domestic contracts. So if you are are buying a home together, create a co-ownership contract or a cohabitation agreement with the help of a Professional Prenup legal professional before the closing day. The agreement should cover the basic questions such as What happens to the property if you split or if one partner dies or who pays the bills etc. The agreement clearly outlines the full details of your arrangement, including what percentage of the home’s equity each partner is entitled to, especially if you contributed different sums to the down payment or mortgage balance, and what will happen to the property if you split up. Prenuptial agreements are important to protect the interests of both the parties.

Home Title

Unmarried couples can either hold a title as joint tenants, in which each person owns the property equally and their share is automatically conferred to the other upon death of the first; or as tenants in common, where each person owns a percentage of the home’s assets, with that percentage going to next of kin, or named beneficiaries, upon death. If you’re unmarried, you need estate-planning documents in place, especially as tenants in common. If you die without a will and you wanted your property to go to your co-owner, unless it’s specified in a will, that won’t happen. It might go to your parents.


How Property and Debt are settled when an unmarried couple gets separated.

While married couples get to share the value of the property when they separate, this does not work for unmarried couples. Each common-law partner keeps the property they had when they started the relationship. They only have to share the property they own together. Let’s take an Example:

Mary got separated from her Partner and had $10,000 in her bank personal account. Mary also had $40,000 in a joint bank account with her partner. As per the Law, Mary will keep all of the $10,000 which was in her personal bank account and half of the joint money i.e $20,000, which they shared as in the joint bank account.

When it comes to the property, the situations are not as simple as dividing the money. Therefore they get to share the value of the property instead of the property itself. For example, they owned the home which was valued @ $5,00,000. Mary can buy the property from the partner by paying them the value of half the property or you can sell the home and split the Money.

If however,  the common-law partners do not get a share of each other’s property, you can still put forward your claim through “unjust enrichment” Clause. A claim based on unjust enrichment means that it would be unfair to allow your partner to leave the relationship without sharing their property. This can be a tough cookie to crack so you will have to prove that your partner benefited in the property from your contribution directly or indirectly. Through “unjust enrichment“, you do not get half the share but assessment is done based on the fair share and division is made accordingly.

Buying a home can be complicated and even more so if you are buying as an unmarried couple. Follow the tips above and get the help of a professional Prenup Agreement Lawyer and a real estate professional with expertise in this area to help guide you through the process.