Breaking Up vs. Real Estate for Couples Getting Divorced in Ontario

The end of any relationship can be stressful and challenging, especially when a common-law relationship or marriage ends, this can also create additional challenges. However, figuring out your next steps when your relationship ends and dividing up property and assets with your current or former common-law partner or your spouse can be even more difficult.

If you are looking to learn more about your rights related to real estate, property ownership, and the division of property in Ontario, when your common-law relationship or marriage ends, this is article was written for people like you.

In this article, we will compare and contrast the differences between what your rights are to real estate and assets when your common-law relationship ends in Ontario, and when you are getting legally separated or divorced in Ontario. It is important to note that this article is a primer on what your rights are concerning real estate and assets when your common-law relationship ends, you are legally separating, or getting divorced in Ontario.

Before you read any further, you must know that what is described in this article does not constitute legal advice. If you have any legal questions about divorce, the division of property with divorce or the end of a common-law relationship, your specific situation, etc. you should consult a divorce lawyer.

This article is meant to be a starting point for you to learn about your rights concerning real estate and assets so if your relationship ends. Ideally, after reading this article if and when you consult an attorney, you will be to go into a meeting with them, with some understanding of what you might be able to expect to happen as you go about separating you and your current or former partner’s lives.

It is important to note that in Ontario, in the eyes of the law, couples that have lived together for at least three years as spouses that are not legally married to each other, are considered to be in a common-law relationship. This means that you could live together with your common-law partner for many years, you might even have children together, and even refer to your common-law partner as your “husband”, “wife”, or “spouse”. But being in a common-law relationship does not mean that you and your common-law partner are or were legally married.

For the sake of argument, “married” is a couple who are or were in a marriage that is or was legally recognized in Ontario. A legally recognized marriage in Ontario would be a marriage where the couple had a marriage ceremony that was performed by an individual who had the legal power to marry them, such as a judge, a justice of the peace, religious official, etc.

The distinction between common-law couples and married couples in Ontario is important in instances when you are dividing property and assets, making decisions about what happens to the family home, deciding whether or not to sell the family home, and who is allowed to remain in the family home, and/or figuring out who is entitled to receive the benefits from the sale of the family home. Depending on what type of relationship you are or were in, i.e. common-law relationship versus a legally recognized married will impact your property rights, how property will be divided, your right to the family home, and how assets will be divided when your relationship ends.

It is important to note that when you are dealing with anything related to family law in Ontario, concerning spousal support, child support, custody, and access, in the eyes of the law, it does not matter if you and your spouse are or were legally married or living in a common-law relationship. The rules in these instances are the same for married and common-law couples and apply equally, there is no distinction between couples in common-law relationships or married or divorced couples in these situations.

For a more detailed examination about the division of property after divorce in Ontario, check out “Things You Should Know About the Division of Property After Divorce in Ontario”, to learn more about getting a new mortgage after divorce “Getting a new mortgage after a divorce: How to get a  new mortgage after divorce” or about selling your home after divorce [How to sell your home after divorce?].

Property ownership rights for common-law couples in Ontario

As mentioned earlier, the type of relationship you are or were in will determine your property rights. For example, in Ontario when you are in a common-law relationship you will not automatically have a legal right that entitles you to your common-law partner’s property like you would if you are or were legally married.

While, if you can demonstrate that your actions during your common-law relationship made it possible for your common-law spouse to acquire property or wealth or your actions significantly contributed or supported your common-law partner’s acquisition of wealth, you can ask a court to order your common-law spouse to give you some of their property. If you are planning on making this claim, you will need to file this claim within two years of separating from your common-law partner.

Usually, when a common-law relationship ends, each spouse will keep the property and assets they brought with them into the relationship as well as anything that they might have bought during the relationship. The only property that will be divided equally when a common-law relationship ends will be any property or assets where both spouses are listed as owners. 

However, if you and your common-law partner have a cohabitation agreement, your property and assets will be divided according to whatever is outlined in the agreement. Common-law couples like married couples can also draft a separation agreement detailing how to divide the property.

What happens to your property when you and your common-law partner cannot agree on how to divide your shared property and/or assets?

If there is an instance where a common-law couple breaking up cannot agree on how they should divide their shared property and/or assets, and mediation and other negotiation tools have not worked for them, they might go to court and ask a judge to decide for them about how they should be dividing their property. You might consider asking a judge and the court to help you and your partner with determining how to divide your shared property if:

• You and your common-law spouse cannot agree on how to divide something that you and your spouse acquired together, as a couple
• You and your spouse had previously agreed on planning to share a property that was only in one spouse’s name
• The property is in your spouse’s name, but your actions made it possible for your spouse to acquire this property and you have suffered financially because of this
• The property in question is in your spouse’s name, but your actions helped add to the value of this property or asset and you have suffered because of this.

Ideally, you should be able to get some of the value of your common-law spouse’s property, property that is in your spouse’s name if you are able to demonstrate how work you did or your actions helped enrich your spouse, i.e. you contributed to your spouse’s business or supported them financially while they were in school or advancing their career.

The court recognizes that the unpaid labour women and femmes do in the home, such as taking care of the home, family members, relatives, and caring for children is something that helps enable couples to become wealthier. The court recognizes this labour but fighting to ensure that you receive some of your spouse’s property can be time-consuming and expensive. You should speak with a lawyer if you believe that you are entitled to some of the value of your common-law spouse’s property.

Property rights for married couples separating or getting divorced in Ontario

The matrimonial home for married couples and how the matrimonial home is related to property rights in Ontario?

What is the matrimonial home and why is it important when you are getting separated or divorced?

The matrimonial home (the family home) under Ontario’s Family Law Act is given a special legal status and will be treated differently than other assets or properties that you own(ed) individually, your spouse owns or owned individually, or with your spouse. Given that the matrimonial home is granted a unique legal status for couples who are or were legally married (your marriage to your current or former spouse is/was legally recognized)

This makes making decisions about what to do with the matrimonial home and dividing the value of the matrimonial home more complex. Since the matrimonial home might be one of the largest and/or valuable assets they may ever own, it can be incredibly challenging for couples to figure out what to do with the matrimonial home because of this.

However, if your marriage is or was legally recognized in Ontario, you will have more rights as it concerns the matrimonial home and the division of the value of the matrimonial home than you would if you were unmarried or in a common-law relationship.

The matrimonial home’s unique legal status under the Ontario’s Family Law Act means that both spouses have an equal right to possess and live in the matrimonial home until or unless the matrimonial home is sold, a judge grants a court order that requires one spouse to move out, or you and your spouse come to a formal resolution that addresses who is staying in the matrimonial home. Neither spouse is allowed to prohibit the other spouse from living in the matrimonial home. Additionally, neither spouse will be allowed to change the locks to the matrimonial home in an attempt to lock the other spouse out of the matrimonial home.

More often than not, if a couple has children together, their children will probably remain in the matrimonial home. While you might legally maintain the same right to possession of the matrimonial home, it might not be recommended or realistic for you and your spouse to continue living together while you are getting separated or divorced.

If you and your spouse were married and then were legally separated and one spouse decides to move out of the matrimonial home, you will not be allowed to change the locks when your spouse moves out. Under the Ontario Family Law Act, you have no legal grounds that allow you to change the locks when your spouse moves out as to lock them out of the matrimonial home.

However, there are cases when a family court judge will grant an order of exclusive possession, where the court orders for the lock(s) for the matrimonial home(s) to be changed. This might happen if there are circumstances that create a situation where you would need to change the locks to the matrimonial home to protect your safety.

It is important to note that if one spouse decides to move out of the matrimonial home, the spouse who moves out will not be entitled to be able to come-and-go from the matrimonial home at will. If they (the spouse who moved out) will be coming or going from the matrimonial home, they will be required to provide the spouse who has remained in the matrimonial home, with reasonable and adequate notice of any intention they have to return to the matrimonial home.

For example, you continued to live in the matrimonial home and your spouse moved out before you were legally separated, and your spouse needed to return to the matrimonial home to collect the personal property they left behind, they will be required to provide adequate and reasonable notice of their intention to return to the matrimonial home to collect their personal property. In other words, your spouse cannot show up out of the blue one day at the matrimonial home, without providing you with any advanced notice of their intention to return to the matrimonial home.

When a family court judge grants a court order in favour of one spouse being able to maintain exclusive possession of the matrimonial home, this spouse will be the only spouse who will be able to legally be allowed to live in the home, no matter who legally holds the title for the matrimonial home.

What is an order of exclusive possession for the matrimonial home and how might it affect you if you are separated or getting divorced?

An order of exclusive possession is a court order granted by a family court judge, that allows only one spouse, the spouse who the order of exclusive possession for whom was granted in their favour to live in the matrimonial home. Therefore, the other spouse, when an order of exclusive possession has not been granted in their favour, will be legally forced to move out of the matrimonial home and live somewhere else.

Orders of exclusive possession of the matrimonial home are not meant to be a long-term solution, they are only intended to be a short term solution that is supposed to last a certain period of time. Orders of exclusive possession of the matrimonial home usually allow for the other spouse to be able to periodically re-enter the matrimonial home provided they are giving the spouse who is living in the matrimonial home adequate and advanced notice of their intention to re-enter the matrimonial home.

When a judge grants order of exclusive possession of the matrimonial home, they are not trying to make any judgments that the spouse who is allowed to remain in the matrimonial home should be the one to get the matrimonial home and the spouse who is forced to vacate the matrimonial home should not be allowed to own the matrimonial home.

Having an order of exclusive possession of the matrimonial home granted in your favor DOES NOT allow for you, the spouse who is legally allowed to remain in the matrimonial home to sell or dispose of any furniture, personal property or other belongings until a court has fully resolved all of the issues related to separation and divorce, this includes the equalization of any net family property.

Most importantly, if a court grants an order of exclusive possession of the matrimonial home in your spouse’s favour or in your favour, this will not affect your property ownership rights. It is important to note that when a court grants a temporary order of exclusive possession, this is intended to provide you and your spouse with time to craft a completed separation agreement.

It is important to note that if you are being abused by your spouse in the matrimonial home, you might consider applying for an order of exclusive possession. If you are being abused by your spouse, it is recommended that you find an advocate, a lawyer, and other people who understand domestic violence to support you. A lawyer and an advocate can help you through this situation, inform you of your rights as a victim of domestic violence. A trained advocate and others who work with victims of domestic violence can work with you to develop a safety plan, especially if you are worried that your spouse might harm you, your children, pets, family, or cause damage to your home.

Neither you nor your spouse is allowed to sublet, rent, sell, refinance, mortgage or place a line of credit on the matrimonial home without first receiving written permission from your spouse.

The unique protected status granted to the matrimonial home under Ontario’s Family Law Act means that you cannot do anything major to the matrimonial home or make any major decisions about the matrimonial without receiving your spouse’s written permission first.

You and your spouse must jointly decide on whether or not to sell the matrimonial home. However, if your spouse agrees to sell matrimonial home and they do not cooperate with your efforts to sell the matrimonial home, you may need to file an application with the court to ask them to make it possible for you to sell the matrimonial home.

If you are in a situation where your spouse had previously agreed to sell the matrimonial home but has created obstacles to you selling the matrimonial home, you should speak a divorce lawyer about what your options are in this situation. If your spouse has agreed to sell the matrimonial home, they are not allowed to create obstacles that would prevent you from selling the matrimonial home.

What are your property ownership rights concerning the matrimonial home and the division of the matrimonial home when you are separating or getting divorced in Ontario?

First, in the eyes of the law, it does not matter whose name is currently on the title and deed for the home, if both of you have lived there together as a married couple before the date of your separation, this home is still considered to be the matrimonial home.

In case you are wondering, you could theoretically have purchased, owned, and lived in what is now the matrimonial home, before you even met and married your spouse, but if you lived in the home with your spouse after you were married and before your separation and your home will forever be known as the matrimonial home. 

The moment that you and your spouse were married and moved into a home together and continued living in a home together before the date of your separation, this home immediately becomes the matrimonial home. Once home in the eyes of the law is viewed as a matrimonial home, it will not matter who owns or owned the home. It does not matter if you inherited this home or this home was gifted to you.

If your spouse moved in after you were married and you were living there together before the date of separation, this home will be considered the matrimonial home. However, your inheritance or any money gifted to you will be exempt from division UNLESS you are putting money from your inheritance or funds that were gifted to you into the matrimonial home. 

Additionally, it is important to note that if the funds that you used for the down payment to buy your matrimonial home were gifted to you, your spouse will not be legally required to repay the value of the gifted funds that you used for the down payment.

You can do your best to negotiate with your spouse to ensure that they repay the gifted funds for the down payment, but no court will legislate this. The value of the equity in the matrimonial home will always be divided except in situations where you have a prior marriage contract which details how the value of the matrimonial home will be divided.

Specific considerations related to the matrimonial home and your property ownership rights for couples who are in common-law relationships in Ontario

If you are in a common-law relationship in Ontario, the rules that give couples who are or were in legally recognized marriages a multitude of rights as it concerns the matrimonial home will not apply to you. 

Usually, for common-law relationships, the matrimonial home belongs to whomever the home is registered to. However, this might not be the case in an instance where you have a signed cohabitation agreement with your partner specifying who is entitled to live in the matrimonial home, how the value of the matrimonial home will be divided. If you have a cohabitation agreement with your spouse that is recognized as being legally binding, then you must follow this agreement.

Typically, with common-law relationships, whatever you entered the relationship will be yours whenever the relationship ends. Additionally, it is important to note that common-law couples in Ontario do not benefit from having the same statutory property rights as married couples. Therefore, once your common-law relationship ends you might not be legally permitted to stay in the family home if it is not in your name if it is in your partner’s name.

Given that common-law couples do not enjoy the same statutory property rights as married couples in Ontario, if only one spouse owns the matrimonial home, they will be allowed to sell the home, mortgage it, rent it, etc. without the other spouse’s permission. This is true no matter how long you and your common-law spouse have been together, whether you have been together for five years or twenty-five years. 

However, if your common-law partner is abusing you, you might be able to stay in the matrimonial home even if the matrimonial home is registered in their name instead of it being registered in your name. For you to be able to stay in the matrimonial home if your common-law partner is abusing you, you would need to apply for and have a restraining order granted specifying that your abuser is prohibited from entering the property. Such a restraining order would theoretically allow you to keep living in the matrimonial home. 

You must know that it could be difficult for you to get a restraining order allowing you to remain in the matrimonial home and prohibiting your abusive common-law spouse from entering the matrimonial home. If your spouse is abusing you, you should consult a lawyer and an advocate so you can learn more about your rights and options.

Property rights in Ontario for married couples when you are dividing assets and property when you are separating or getting a divorce

For this article, we are defining property as anything you own, including includes money (investments, cash, etc.), pensions, Registered Retirement Savings Plans (RRSP), insurance policies, and disability benefits, other financial assets, real estate, businesses, frequent flier miles, and any other assets that a couple has. Property is being defined as anything you own.

Therefore property, when you are dividing property and assets with your spouse is everything that was previously mentioned, and this could also be cars and other vehicles, personal items including clothing, jewellery, and artwork, household items, such as furniture, appliances, electronics, antiques, etc.

Property rights and the basis for the division of property for married couples getting separated or divorced in Ontario

When you are separating or getting divorced in Ontario, all of the property that a couple has acquired during their marriage must be divided equally. So, if your spouse owns property or assets that are worth more than your property or the assets, then your spouse are legally obligated to pay you or give you half of the difference in value between their property and your property/assets to help ensure that both of you are leaving the marriage on equal footing. 

If you are unable to come to an agreement about how to divide property and assets, you can have a court to decide how to divide property and assets. However, you must claim this within six years after legally separating from your spouse and within two years of finalizing your divorce.

In this situation, in the eyes of the law in Ontario, it doesn’t matter who is paying for things or whose name the matrimonial home is in. The value of the matrimonial home is equally divided between spouses even if one spouse owned the matrimonial home before marrying their spouse.

However, there is one major exception to the rule about equally dividing the value of the matrimonial home between spouses. In this instance, if one spouse owned the home that the couple used as the matrimonial home and then they sold the home that was used as the matrimonial home before the marriage ended, the spouse who owned the home will be allowed to count the value of the home on the date of separation minus the value of the home on the date of their marriage and this value does not have to be divided equally.

You would calculate how much you would be obligated to pay your spouse in the following manner: The total equity in the home (home’s total value minus debts/liens, etc.) on the date of separation minus the total equity in the home on the date of the marriage. Then you would divide the difference in value by half and give your spouse half of this change in the value of the home.

The following is an example to help illustrate how you would calculate what you owe your spouse assuming you owned the matrimonial home before the marriage and sold it before your marriage ended.

On the date of your marriage, your house was worth $400,000. On the date of separation, your home was worth $700,000. In this hypothetical scenario, you would calculate $700,000 – $400,000, the total change in the value in the home was $300,000. Now you would divide this $300,000 by two and you would be paying your spouse $150,000, to compensate for the increase in the home’s value while you owned it.

In other words, if you owned the matrimonial home before you and your spouse were married and did not sell it before your marriage ended, you would be obligated to give your spouse one half of the total equity in the home upon the date of separation.

For a more detailed examination of how property is divided when you are getting divorced in Ontario and discussion of how to calculate equalization payments when you are separating or getting divorced in Ontario, check out our article “Things You Should Know About the Division of Property After Divorce in Ontario”.

Also, if you are looking to learn more about your options for managing the real estate after divorce, check out our article “How to sell your home after a divorce”. If you want to learn more about selling your home after a divorce, you learn more about this by reading “How to sell your home after a divorce”. If you are looking to get a new mortgage after your separation or divorce has been finalized you can learn more about this, by checking out our article “How to Get a New Mortgage After Divorce”.

Conclusion

Ideally, now that you have finished reading this article you will have a better understanding of what your rights are when your relationship ends in Ontario, whether you and your current or former partner were unmarried and living together, in a common-law relationship or were legally married. Breakups and divorce can be incredibly difficult and challenging but knowing your rights in these situations can help make moving forward when your relationship ends just a little bit easier.

We cannot say this enough, this article is meant to be a jumping-off point for you to begin to learn more about your rights when your relationship ends. This is not a be-all and end-all guide on what your rights are when your common-law relationship or marriage ends in Ontario. If you have any specific legal questions related to your specific situation, you should consult a divorce lawyer since they will be able to better advise on how to proceed.

When your common-law relationship ends or your marriage ends, you should be prepared to spend the time, energy, and money to get your affairs in order, legally, financially, logistically, and emotionally.

Whether this means assembling a team of professionals who work with people getting divorced to help you manage your financial, logistical, and legal affairs, or seeing a therapist or counsellor help you deal with the emotional fallout related to your marriage ending or a licensed massage therapist who can help you to relax and relieve some of the stress you might have internalized with your marriage ending.