There are many misconceptions which exist with respect to the rights of common law versus married individuals in Ontario. As a family lawyer I am amazed at the enduring and potentially dangerous myths which circulate as to how these two types of partnerships are actually viewed in law, particularly when it comes to the issues of spousal support and division of assets and debts after separation.
One of the most routine questions I get from clients is what exactly constitutes a common law relationship in Ontario. The answer is simple. If you are living with someone in the same residence in a romantic relationship, no matter how long you have been doing so, you are in a common law relationship.
What is not quite so simple, however, is the manner in which the law views a person's rights coming out of a common law relationship as opposed to coming out of a marriage. Rightly or wrongly, and until the law changes in Ontario, these two types of relationships are not viewed as equal.
The key difference between the two does not lie with spousal support rights, but with property rights. Upon relationship breakdown common law partners are entitled to claim spousal support from each other and such claims are evaluated based upon the same criteria as married persons (i.e. the length of the relationship, the means and needs of the individuals, differences in income, and roles assumed during the relationship for children).
When is comes to property rights, however, the differences are substantial. While married persons are entitled to and responsible for a portion of all assets and debts accumulated by both partners over the course of the marriage, common law partners are not entitled to make such claims against one another. The current Ontario family legislation does not provide an individual coming out of a common law relationship, no matter how long it has lasted, with a legal entitlement to any property, or to the increase in value of any property, which is not in his or her name at the time of separation.
So what does this mean from a practical perspective and how is it dangerous? Well, it is dangerous, especially in long-term common law relationships, as one partner can contribute a great deal of time, effort and money towards an asset, very often a home, during the course of the relationship and end up with nothing to show for it upon separation.
The following is a classic example: Karen moves in with Michael in 1998 when they are both 29 years old and they decide to live together but not get married. Michael owned the house they live in prior to their relationship and only his name is on the deed and the mortgage. Karen and Michael both work fulltime and contribute to the expenses of the home on a monthly basis including utilities, groceries, paying down the mortgage, and generally making the home comfortable and livable. They paint the home as required, redo the dining room and the driveway, add a hot tub, etc. They both contribute to the household chores. Karen does not obtain any other property but funnels her income into the home she shares with Michael for their joint benefit and enjoyment during the relationship.
It is now 2009 and Karen and Michael can no longer stand each other. They want to go their separate ways. They are now both 40 years old.
Karen sees a lawyer and explains that all she wants is her half of the increase in the equity of the matrimonial home over the past eleven years.
Karen's lawyer gives her the bad news. As she is not married to Michael and he is the only one on the deed of the home Ontario family law does not entitle her to a portion of the increase in equity of the home, despite her contributions over the past eleven years.
While Karen is entitled to bring an action in the civil court by way of a "trust claim," as her lawyer will likely explain to her, if the claim is contested by Michael it can be a costly, slow and frustrating process. Karen will likely have to dig up her receipts and bank statements for the past eleven years, proving her itemized contributions to the home in detail, and even then there is no guarantee that her claim will be successful. This is up to the judge who hears the case after what will no doubt be lengthy and emotionally exhausting litigation. In addition, if Karen is not successful in her claim at the end of the litigation, she will likely have to pay Michael back for his legal costs.
So, what is the moral of the story with respect to the current family law in Ontario and common law relationships? Two words: protect yourself. It is important for individuals in common law relationships to know their rights going into and coming out of these relationships by speaking to a lawyer and taking action in protecting their rights to the value of assets to which they are contributing.
Self-protection can be accomplished, as your lawyer will explain, by way of a) obtaining an ownership interest in the asset (i.e. getting your name on the deed, as a joint owner, of the home you live in) or by b) entering into a contract with your common law partner which specially sets out each of your rights, entitlements and obligations upon separation. Such agreements, referred to by lawyers as "cohabitation agreements" are not overly costly and are becoming more and more common, just as common law relationships are as well. While this may seem like an unromantic undertaking when things are good in a relationship you may be very happy you decided to do it if the romance ends.
