 |
|
Goodbye, home
2010-01-13
When a relationship fails, the law clearly differentiates between married and common law partners when it comes to divvying up assets . Basically, there can be no matrimonial home without matrimony
Aylmer Hull Gatineau | Quebec | Gatineau Real Estate Listings | Homes For Sale | Home Buying Selling | Agent Listings | MLS Realty | Land | Residential | Property | House Real Estate | REALTOR | Real Estate Agent | Broker | Relocating | Relocation | Local Information | Free Reports, QC | maison a vendre Gatineau
Paula and Tom (not their real names), lived in a modest home just east of Ottawa. Like many young couples it was to be a stepping stone to something bigger.
However the relationship did not last. Tom found work in Edmonton and the couple decided to separate.
They were not married, but both were registered as home owners. Paula kept the home, but was forced to pay Tom his share. Tom was given good advice when he bought the property. Had he not been one of the registered owners, he would have been forced to move without getting any financial compensation. As it turned out, the separation went smoothly and they are still friends.
Living together has its financial burdens. These burdens often increase when couples separate.
If you are married and decide to separate, each spouse is entitled to a share of the matrimonial home. If you live in a common law relationship, the rules change.
Common law couples are not entitled to a share of the home, unless, like Tom, both parties are registered as owners. These rules apply to single-family homes, townhouses and condominiums.
Lori Clarke of Ottawa was not so lucky when her common law marriage broke up. She calls herself an illegitimate wife. "For the 24 years that we were together, I thought living common law was the same as being married," says Ms. Clarke. "I was astounded to learn there is no sharing of property when common law relationships end."
In a one-person crusade, she has written to Premier Dalton McGuinty, then Attorney General Michael Bryant and her MPP, Madeleine Meilleur, in an effort to have the laws changed. She wants common law couples to have the same protection as married couples when it comes to property division.
If they can afford it, some couples end up buying a second home. Susan Allan of Keller Williams Ottawa Realty acts for many couples when they buy or sell homes, especially those entering the market as a result of family breakups. In her experience one spouse usually buys the other spouses' interest, then sells the home a few years later.
"This happens quite consistently with families, especially those that have children at home," says Ms. Allan. "We often have clients who buy a second place for one of them to go."
While this increases the financial burden, it is often for a short time, usually until the matrimonial home is sold and the money is divided.
Some couples don't have the financial means to buy a second home. Unlike homes sold when a mortgage is in default, there are no bargains on breakup sales.
Each side wants to maximize the sale price, so that their half-interest gives them a down payment for their next home.
"There is still a slight stigma attached to couples selling as a result of a split," says Ms. Allan. "Some buyers believe they will get a deal, although that has faded as more people get divorced."
At the end of the day, the veteran real estate agent suggests that market value determines the price, not why the property has been listed.
Greig Reynolds of Royal Lepage Team Realty agrees that few people disclose the reason for sale. "None of the brokerages would be privy to the circumstances of a home sale, only the respective agents." Even then he suggests, privacy laws would prevent that information being disseminated.
As to transfers between spouses, no one other than the lawyers know and they are bound by confidentiality rules. At the end of the day, there is no free information and there are no bargains.
Andrea Camacho, an Ottawa family law lawyer, suggests that the best way to avoid disputes is to draft an agreement.
"Couples, be they married or not, should consider having a marriage contract or cohabitation agreement that would set out each of the parties' rights when it comes to property division." She also recommends that same-sex couples do the same and set out their respective entitlements to their matrimonial home.
"There is always the possibility of a legal argument that one spouse, though not a registered owner, did some work around the house or paid the mortgage.
"A 'trust' claim for the value of work or payment could be made," says Ms. Camacho. "One common law spouse would then have to buy the other's interest in the home because of that trust argument."
But like all other legal matters, it may take time to resolve. It is best to sort out these ownership issues when the couples are in love and still talking.
Given her personal experience, Ms. Clarke wants other common law spouses to know their rights. "Family Law Acts are different across the country. Basically everything you have in your own name alone remains yours. This can leave one partner extremely disadvantaged." Her advice is not to assume that everything is split down the middle, especially when it comes to your home. Buyer beware may well have become, spouses beware.
Les Vandor is an Ottawa lawyer, author and broadcaster.
- - -
After the breakdown
Following the disintegration of a marriage spouses are:
1: Generally required to equally divide the value of all property they accumulated during the marriage.
2: The matrimonial home must be equally divided between the two partners.
3: The home need not be sold as one spouse can purchase the other's interest. This is called equalization.
4: Spouses also have equal rights to live in the house. This is called possessory rights.
Legalities of matrimonial home
Common law spouses have no interest in real property by virtue of the two of them living together. If they are to be added as joint owners, the provincial transfer forms require them to state that they are not spouses.
In the same document, for the purposes of Land Transfer Tax exemptions, common law spouses can state that they are spouses for tax purposes.
As far as the land transfer system goes, the term matrimonial home can only be associated with married couples and never with common law spouses. In simple terms there can be no matrimonial home without matrimony.
Your rights
Following the breakdown of the relationship, common law spouses do not have a right or entitlement to the home registered in the others name.
1: If the common law spouse contributed to the home, he or she may be able to make an argument for a trust over the property. This is called a constructive trust.
2: If common law partners own a home jointly, one spouse may bring an application to have the home sold. This is called partition and sale.
Source The Ottawa Citizen
» View all news
 |
|
|
