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.

Non-Spouses

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:

  • Defining what each has put into the house at the time of purchase ... both in equity and legal or other costs. Memories fade later. Agreements are a record of what happened.
  • Defining whether the house will be sold or one person will buy the other out if they separate.
  • If one is to buy the other out, how would the house be valued? If it was being sold, realtor expenses would be incurred. Should all or part of that potential cost that be deducted from the value even if it is not being sold.
  • What would happen if the person who is supposed to buy the other out refuses or cannot raise the money. Maybe they are unable to borrow the money either. What would happen? Would it be sold then?
  • Does being joint on title mean that one person who put in less or nothing at all gets half of the proceeds, or do you get your initial investment back first? That would seem more fair but the person who put in little or nothing may not play fair later on, or they may feel they have an alternative argument that ought to be considered.

    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:

  • Joint title with the right of survivorship. This means that you each own the property together and if one person dies, the other can apply for full ownership. It bypasses any will that you may write.
  • Joint ownership without the right of survivorship. (Not as common but it certainly is an option)
  • Tenants in Common - Each of you will receive your own title saying that you own 1/2 or 1/10 of the property, or whatever fractions you have agreed to at the time of purchase. If one person is paying 75% of the downpayment and the other is putting in 25% but after that your contributions will be equal on mortgage payments, etc, then remember this is not a perfect solution either. That's why an agreement is really the only way to go. People usually are so confident in their relationship and they don't want to question it so they don't get an agreement with their non-spouse partner. If that is what they choose to do, they need to remember that they are taking a risk that there will be a problem later on if and when they part 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. A conflict check would also be required before our firm can act for someone. You should seek specific legal advice regarding your circumstances from a lawyer entitled to practise law in your jurisdiction.
    * Richard Carlson Legal Prof. Corp.

    www.rickcarlson.com | Sunday, Jan 19 2025 12:54 pm UTC1 (-6 hrs for Sask)