Common-law property division a challenge for real estate

Did you know that couples who are married under common-law rules have special needs when it comes to property ownership? Purchasing real estate without purchasing an engagement ring is becoming increasingly common in British Columbia and other parts of Canada — and without the benefit of traditional divorce provisions, common-law couples could end up in hot water if they do not take care when purchasing. Since Canada does not allow true common-law marriages, couples are not automatically afforded the same protections as those who have formally wed.

Although the Supreme Court ruled several years ago that cohabitating couples should have the same legal property division rights as their married counterparts, experts say that the judicial body gave very little guidance on handling common-law breakups. A traditional marriage is essentially considered a partnership, regardless of who contributes to the jointly held bank accounts. As a result, property is equitably divided if a divorce occurs, with the less “moneyed” spouse often receiving a higher share of the marital property. This is not always the case when it comes to common-law marriage, however.

With the number of common-law marriages rising at an exponential rate among the Millennial generation, Canadian lawmakers and courts certainly have their work cut out for them. In fact, the number of common-law couples rose by a whopping 14 percent in just five years between 2006 and 2011, according to survey numbers. Consider, also, the fact that 17 percent of couples are buying real estate together before they are married, and the implications become even more staggering.

The tenuous nature of common-law marriage in Canada means that real estate purchases should be carefully planned with the help of a family lawyer. Property division during a breakup could be exceptionally difficult without the requisite amount of forethought. Marriage may be optional, but property division problems can arise whether you want them to or not — protect yourself by taking the recommended legal steps before making a big purchase.

Source: Financial Post, “When the only ring is on your keys: What common-law couples should know before buying a house together,” Danielle Kubes, Sep. 16, 2015

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