What happens to the property after a divorce

What happens to the property after a divorce

In a previous post, we have addressed the “divorce buyout” program. To know what this program is all about, click here. Is the buyout all you need to know about mortgages in the case of a divorce or separation? Not necessarily. There are a few other things you should know if your relationship with your spouse or common-law partner comes to an end.

Who gets what in Ontario when it comes to a divorce?

Each province and territory in Canada has different laws when it comes to deciding how the property is divided. However, they all have one thing in common: in Canada, a marriage is an equal partnership. Your contributions are considered equal. Therefore, in Ontario, a spouse is entitled to half of the ‘matrimonial home’, even if he/she bought it before getting married or moving in.  By the same token, both spouses have equal rights to remain in the house, even if only one of them has their name on the documents. 

Divorce: Is a common-law relationship different from a marriage?

It is slightly different.  In Canada, a person is considered common-law if he/she has lived with the other partner for three years, or sooner if they both have a child together.  In this case, the property is divided based on ownership: if you purchased the property before entering the relationship, it remains your own property. If you purchased that property together with a joint title, then the property will be divided equally. If one partner claims to have contributed more to the asset than the other, you can advance a trust claim to accurately reflect the actual contributions by each one of them. 

Couples can sign a marriage contract or cohabitation agreement (if you’re common law) that details who gets what and who would be responsible for outstanding debts if the relationship ends. These are legal documents that hold up in court, assuming they were executed properly. They must be completed with an attorney.

We will address in another post, what happens if a spouse or partner leaves the home before the divorce is filed. Don’t forget to contact us if you have questions about this or other topics in the world of mortgages.