In Ontario, people often assume that once you have lived together for a long period of time, they will have the same property rights as a married couple, but this is not true. In Ontario, the law treats the property rights of married couples rather differently than it does for unmarried or common law spouses.
As an example, in Ontario, unmarried couples are not entitled to an equalization of net family property upon separation, whereas, married couples are. Unmarried couples are often surprised to learn that there is no default presumption in the sharing of the growth of the family’s wealth during the time the parties cohabited.
Similarly, the Matrimonial home is a concept that applies only to married couples and offers individual special protections not available to unmarried spouses, at common law.
There are, nevertheless, remedies available for common law spouses namely, the constructive and the resulting trust. A constructive trust is an equitable remedy, that if granted, gives a right to property or particular asset to a cohabitating spouse who was not originally on title.
A resulting trust arises when one individual pays for (or helps pay for) a piece of property, but does not appear on title to that property. Providing certain circumstances exist, he or she becomes the beneficial owner of the property and it is presumed that the legal titleholder is holding the property in trust, for the beneficial owner of the property.
As trust cases provide unique challenges and complexities, it is always advisable to seek legal advice to determine the strengths and weakness of any position. An understanding of one’s rights (or lack thereof) may be helpful in drafting a cohabitation agreement to give formal effect to a party’s wishes.
The team at Lakhan Tram have successfully argued cases involving constructive and resulting trusts and routinely draft domestic contracts such as cohabitation agreements for unmarried couples. Contact us to speak today.
