September 28, 2023

Buying a house with your common-law partner

When we fall in love, we want to build a life together. One of the many joint projects in a couple’s life often involves the purchase of a house. If you are in a common-law relationship and want to buy a property, here are some tips on what you should know before your purchase.

Who are common-law partners?

In Quebec, almost 40% of couples are in a common-law relationship. This represents a large number of people whose property is not protected by any rights and who must take steps to protect their assets.

According to the law, it refers to two unmarried people in a marital relationship. They must also be the parents or have legal custody of a child and/or have lived together for at least 12 months.

Common-law partners vs. married spouses

Whether you are married or not, you should be aware that there are some differences in the law regarding the separation of property.

For married couples, family assets are automatically divided equally between spouses if they should separate. It’s simple!

But what happens when common-law partners separate? In this case, the ex-partners will have to decide for themselves how to separate the assets and, unfortunately, have to do so without the law to back them up. Ideally, a couple should come to an agreement on how assets will be divided when they are happy and BEFORE they purchase a home.

Co-owners or one owner?

If you are not married and are thinking about buying a house together, then this tip could help you in the event of a separation: both parties should sign the deed of sale. In this way, you will be equal co-owners in the eyes of the law.

If, for one reason or another, only one of the two partners signs the deed of sale, then that person becomes the sole owner. The partner who did not sign the deed therefore has every interest in protecting themselves if they help finance the purchase.

To ensure that they are protected, the non-owner partner can have the other partner sign an acknowledgment of debt. This document makes it possible to prove that the non-owner partner helped finance the purchase in the event of separation. It’s a bonus if the document has been notarized, as it is much easier to prove the financing in court.

One final piece of advice

The main thing to remember when buying a house as a couple is that, before embarking on this adventure as common-law partners, you should have an open discussion on points such as:

What will each partner contribute to the purchase of the property?
What is each person’s share? Equal shares or not?
Did the down payment(s) used come from an RRSP, personal savings, or an inheritance? From which partner?
Co-owner or sole owner?

It is often said that a relationship works better when there is good communication. Buying a house is great but discussing it beforehand will avoid a lot of future disagreements!