Whose Condo Is it?

[So my Parents Can Relax]

Hi everyone,
My boyfriend and I are thinking of moving in together. I own a condo and he currently rents elsewhere in the city. My family is freaking because they say that if we move in together, eventually we'll be considered common law - which means if we split, he can take half my condo.

Despite their pessimistic outlook for the future of my relationship, I was wondering what to tell them about the law in this regard.

We have decided that since I make 30% more than he does, I will pay 30% more of the mortgage, condo fees and taxes. Other things like utilities etc. we will pay 50/50.

If the day came where we decided to split, can he ask for the money back that he put towards my mortgage etc? Can he demand half of what the condo is worth? Or is what he's contributing considered rent? Does the fact that we're not splitting it 50/50 enter into outcome at all?

Any info would be appreciated!

[standing on the sidelines]

this is why you need a separation agreement. It seems like you are paying the mortgage on your own so I would keep doing that. Get him to buy food etc. Make sure that you get it in writing that he has no claim on the condo. If you want him to pay part of the mortgage then do a rental agreement.

[billm]

Great advice, please follow it. Don't worry about asking him. People who are not comfortable putting their agreements into writing want to keep their options open with respect to honouring the agreement. If he really has no problem with it, then he should happily sign an agreement, he should insist.

I would charge him 1/2 a reasonable rent for the place, and have him pay for 1/2 groceries, utilities etc. There is no need to base it on how much you make compared to him - you should remain financially independent of each other. Keep things equal that way and simple. If you make more, then save it up, or put more toward entertainment etc.

[So my Parents Can Relax]

Thanks for all the advice. I really appreciate it!

[Helpj]

Hello,
This is an interesting situation, and it is wise to consider the issues you raise.
I am not a lawyer, and the above advice is good, however, it does not answer your questions.
My understanding of your situation is that if he moves in and helps with the rent, at the point he becomes common law, he has a right to 1/2 of the amount the condo appreciates over time. If he was there 10 years, and during that time you both pay $60,000 off your mortgage principal, he would have a legal claim to half of that money. Not half of the total principal, just 1/2 of what you both paid off while common law (even though he was not even paying 1/2 monthly).
So you could find a simple prenuptual type agreement draft on-line and/or do the rent thing. Or, if you want, you could allow him to pay 1/2 the mortgage, and if he ever leaves, pay him out the amount he paid into your mortgage (not including the interest he helped paid). The way I see it, both options are fair.
Those are my 2 cents. Good luck!

[ConfusedInManitoba]

I'm in pretty much the exact same situation. My girlfriend is moving in with me and all my friends and family freaked out over it.

You definitely want to either get an agreement and just make them pay rent, or make them pay 50/50 on the mortgage, because no matter how you split it, it's going to be 50/50 later anyway if you don't get something in writing.

[billm]

Having the person move in pay half the mortgage and then getting half the equity from that ponit forward is a rotten deal for the original home owner.

When you separate and they want half the equity during the time together.

They don't get their mortgage principal payments back, they get half the increase in equity. The problem is two fold, your equity at the time when they move in with you, fueled most of the equity increase while you were together, but you don't get credit for that (you have a 100k place, 50k mortgage, 50k equity, but you only get your 50k back, then you split the rest!).

The other problem is that if the place devaluates while you are together, do you think that you can go after them for half of the devaluation? They would laugh at you.

Its a win/win for the person with no assets (all reward, no risk), and the one with equity is the one that takes all the risks yet has to share the rewards.

Make them pay rent (aka written agreement to no claim on home), or buy you out of half the equity, and then share all payments.

[ConfusedInManitoba]

Billm is right of course, its a rotten deal for you either way.

The point I was making is that if they are earning equity by default, then at the bare minimum you should have them pay a full 50% for it.

Don't get sucked into some sort of 70/30 arrangement just because you make more.

It still is a good idea to get anything in writing.

Even if you wanted them to pay 50% you can also write up an agreement thats worded in such a way to protect your current equity.