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Common Law Issues The law regarding common law relationships is different than in cases of divorce. Discuss the issues that affect unmarried couples here.

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Old 01-30-2012, 12:08 PM
twestla twestla is offline
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Default Question about property division

I have searched all through the threads while waiting for my account to be activated, and haven't seen a post exactly like my question so here goes:

I have been in a common law relationship for 8 years. We bought a house together 7.5 years ago. His home at the time was free and clear, so he put in approx $222k into the house we purchased together (title and mortgage is in both our names). Purchase price was $337K. Since that time, we have improved the house financial, but re-financing the mortgage. New kitchen and patio (approx. $66K).

Sadly house was recently appraised at $395k. Question is: If we split, he says he wants his full downpayment back. We owe $169k on a house that is now worth $400k at best. Minus realtor fees, he wont get $222k? Also, does that mean I get nothing from the sale of the home, even though I have contributed 50% of all mortgage payments, utilities, property taxes, as well as sweat equity, and joint purchases for items for the home since day 1? I work full time and we have never co-mingled our finances. We each pay 50% of all household expenses, ALWAYS. He has a commissioned base pay, and he has sometimes voluntarily purchases larger ticket items for the house, i.e. new patio door, replaced some windows etc. after a good commission cheque.

Do I get anything? He may stay in the house. I am not looking for half. Just enough for a smallI downpayment on a townhome or something if I leave. Obviously I havent saved any money for a down payment, since all my money went into the upkeep of our joint home.

Any ideas? thanks to all!
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Old 01-30-2012, 12:17 PM
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Kenny Kenny is offline
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This link may answer some of your questions:

Property Division for Common Law Separation in Ontario

With the exception of unjust enrichment, you both leave with whatever belongs to you I believe.
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Old 01-30-2012, 12:42 PM
springx springx is offline
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I am not from ontario but I will help you out from what I seen being a legal ass. First, the downpayment is given back to whomever. Then, if able, you give back each person what they put into the house for monthly mortgage payments. After that, you split the equity. I think in cases where it gets hard to figure out who paid what each month then the judge will probably just assume it was 50/50 or 40/60 etc.
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Old 01-30-2012, 12:44 PM
springx springx is offline
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Since there is a loss, I am wondering if a judge would make him eat that loss or if you would have to pay that back? I think it would be more reasonable for him to eat that loss since the 2 of you were in a relationship and he should have known better than to do that incase the market does crash.. It is your best bet to fight that you 2 were together and he should eat the loss, since you gained nothing from this.....
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Old 01-30-2012, 12:49 PM
twestla twestla is offline
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Quote:
Originally Posted by Kenny View Post
This link may answer some of your questions:

Property Division for Common Law Separation in Ontario

With the exception of unjust enrichment, you both leave with whatever belongs to you I believe.

Kenny, thank you. I did read this link before posting. there is no issue about the belongings in the home, but about the house itself. We purchased it together (title and mortgage) however, he put the downpayment down. Since purchase, all other payments on home have been 50/50. My question is, after 7.5 years of paying into a home we both owned, do I walk away with no money from the asset? I have paid easily, in excess of $50,000 in principle, interest & taxes over since we purchased.
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Old 01-30-2012, 12:54 PM
twestla twestla is offline
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Quote:
Originally Posted by springx View Post
Since there is a loss, I am wondering if a judge would make him eat that loss or if you would have to pay that back? I think it would be more reasonable for him to eat that loss since the 2 of you were in a relationship and he should have known better than to do that incase the market does crash.. It is your best bet to fight that you 2 were together and he should eat the loss, since you gained nothing from this.....

Thanks for reply. Actually, the market didnt crash. We paid $337k and we might get $400k (conservative side) potentially more, hard to tell in this area. Our issue is we "over-improved" the house (new kitchen, back patio). He would walk away with equity if he sold. Just not as much as he put in. I am finding it difficult to believe that after 7.5 years of paying principle, interest, property taxes, utilities, physical labour, decorating, cooking, yard work etc. I just walk away with nothing. He is considering keeping the house, therefore he wont actually have a loss, unless he sells. In the furture, the home may go up and there wont be a loss.
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Old 01-30-2012, 01:35 PM
Berner_Faith Berner_Faith is offline
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I don't have any experience in this area, but helpful links have been posted... my question is...why wouldn't he be entitled to be paid back for what he put into the place? You are looking for some profit or back pay for what you put into it, should be not be entitled to the same?

I believe in common law you leave with what you came with...so in his case $222k... then if there is equity it should be split...however, the fact that you paid 50% of the mortgage and such kind of is irreverent because you would have to pay something for rent if you were renting a place. On top of his $222k, if he contributed 50% also (you say is $50,000) then in total he has contributed $272k...

In the future if he keeps the house and continues to pay 100% of the mortgage and associated costs, which causes his equity to go up, you would not be entitled to anything, because he paid down the mortgage on his own.
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Old 01-30-2012, 02:05 PM
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He would first get 100% back of down payment. Don't know who paid for the improvement loan? Look at it this way... The down payment from his other home is not real money - he took it out on his other house - it is his debt STILL(paid off or not). Because if you wanted some money back then (lets pretend he did not pay a penny towards his dp loan) you would actually gain more than him in the end even though he took all the risk(his dp). I know it is hard to see but he lost just as much as you did..he is going to own a home that he just broke even with - no gain for him, you are being hopeful with his future, for all you know the home may be work $320k when he sells it....
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Old 01-30-2012, 02:19 PM
twestla twestla is offline
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Quote:
Originally Posted by Berner_Faith View Post
I don't have any experience in this area, but helpful links have been posted... my question is...why wouldn't he be entitled to be paid back for what he put into the place? You are looking for some profit or back pay for what you put into it, should be not be entitled to the same?

I believe in common law you leave with what you came with...so in his case $222k... then if there is equity it should be split...however, the fact that you paid 50% of the mortgage and such kind of is irreverent because you would have to pay something for rent if you were renting a place. On top of his $222k, if he contributed 50% also (you say is $50,000) then in total he has contributed $272k...

In the future if he keeps the house and continues to pay 100% of the mortgage and associated costs, which causes his equity to go up, you would not be entitled to anything, because he paid down the mortgage on his own.

I can appreciate how it would appear that way. I am not looking to profit. When your relationship deteriorates (married or common-law) and your spouse/partner comes home says we should "end it", and "you and your son need to leave", after spending 7.5 years of both of you putting your money away into a home you both have title to. I walk away, he keeps the asset. I helped finance the property, I helped pay into the home upgrades etc. As with any relationship, no one starts out expecting it to fail. I didn't keep a security stash of money, since this was our "home". My income went towards this asset. If I had been renting all these years, I would never have put so much money or effort into something I didnt own. Seems a little unfair. I am waiting for a legal consult, but was looking for some insight here. The responses seem to confirm my greatest fear. We'll see what the lawyer says I guess.
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Old 01-30-2012, 02:26 PM
twestla twestla is offline
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Quote:
Originally Posted by springx View Post
He would first get 100% back of down payment. Don't know who paid for the improvement loan? Look at it this way... The down payment from his other home is not real money - he took it out on his other house - it is his debt STILL(paid off or not). Because if you wanted some money back then (lets pretend he did not pay a penny towards his dp loan) you would actually gain more than him in the end even though he took all the risk(his dp). I know it is hard to see but he lost just as much as you did..he is going to own a home that he just broke even with - no gain for him, you are being hopeful with his future, for all you know the home may be work $320k when he sells it....

I dont think you are understanding my first quote. When we got together, he sold his home. It was free and clear. So it is REAL money. From the proceeds of his sale, he put $222k cash down on the home we bought in both of our names. The home improvements were financed by increasing our joint mortgage amount (re-finance) in both of our names. So we both make payments on the mortgage. He wants to keep the house, so in effect, there is no loss what-so-ever on the home unless he choses to sell it now. In this market (we are outside of Toronto) the house will no go down in price. The price was not inflated when we purchased it 7 years ago. Anyway, I am reading the other comments, and will see what a lawyer says, I just wanted to clarify the situation fully.
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