Sharing Ownership with a Non-Spouse
If you already hold title jointly with someone or are thinking about being joint owners with a non-spouse, you should consider having a written agreement defining what will happen if you split up.
Spouses and Deemed Spouses
In Saskatchewan, you can be spouses with someone either because you are legally married or because you have lived together in a relationship for 2 years or more. Family property rules are the same regardless of how you become spouses. One of those rules is that the family home will be shared equally if you separate. This is so even if one person owned the home and had substantial equity in it before meeting the other person. Sometimes the court might make an exception by altering the formula when the relationship is of very short duration but don't count on it. I'm not a family law lawyer but I understand that those exceptions are very rarely considered by the court. However, if you have not gone through a marriage ceremony and you have not been together for 2 years or more, then you are not yet spouses. The 50/50 rule does not apply ... yet. It will after you have been together long enough.
If you are not spouses but you own title together, then the 50/50 split rule does not apply. Fairness would dictate that each person gets their initial investment back first and then any increase in the equity of the house, either because the value went up or the mortgage balance was paid down, is split equally or according to whatever other percentage might be fair. Presumably both parties were contributing equally to the costs of owning and caring for the home while they were together.
However, people in a breakup are rarely reasonable ... or one may want to be reasonable but the other may have unrealistic expectations. A breakup is a very emotional time and it's not a great time to resolve something. The cost to deal with the problem through the court can be extremely expensive and time consuming. For these reasons and others, you may want to prepare an agreement as you are purchasing the house, spelling out what would happen if you part ways. This could include:
These comments are not meant to be the final answer to these issues. They just underline the need for an agreement at the time of purchase, not at the time of separation.
Remember that once you become spouses, this type of agreement may no longer be binding unless at the time of signing, you also go through the formalities of getting independent legal advice and certificates, etc under The Family Property Act. The agreement will help while you are not spouses, but it may not help once you are spouses unless you comply with all the requirements of that legislation.
One other thing to consider is this: If you are buying a house together with someone who has very little to contribute in comparison to what you are putting in, don't put in a big downpayment yourself. Put in something modest and invest the balance elsewhere. That evens things up a bit and keeps your life savings safe until you know that the relationship is solid and lasting.
Types of Ownership
You can hold title with someone in different ways:
I'm not a Family Law Lawyer
I don't practise family law so please don't look at this article as advice in that area. It's only meant to be an article warning you that you should make an agreement if you are buying a property with a non-spouse. If you need advice on family law, I'd be happy to refer you to someone in our office who practises family law on a regular basis. Again, I'll repeat something I mentioned above. If you sign an agreement but later on, you become spouses, any agreement you may have signed before may no longer be valid unless at the time of signing, you go through the formalities of The Family Property Act. That includes hiring separate lawyers to prepare the agreement, certicates of independent legal advice and other factors that a family law lawyer will incorporate into the agreement.
Notice: The information on this website is general in
nature only. It relates to Saskatchewan, Canada and may not be
applicable in your jurisdiction. It does not constitute legal
advice to you and no solicitor client relationship will be established.
You should seek specific legal advice regarding your circumstances
from a lawyer entitled to practise law in your jurisdiction.
www.rickcarlson.com | Thu, 19 Apr 2018 18:21:36 CDT1
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