PROPERTY DIVISION FOR UNMARRIED COUPLES –
GENERAL INFORMATION
Introduction
Many people think that there is some special magic to the term “common
law couple”. People say “oh, we’ve only been living together for six (6)
months so we aren’t common law yet”. People think that once they are
“common law” that all the same rules as a married couple will apply. This is
not the case. First, there is no one specific definition of a “common law
couple”. When we are talking about unmarried or common law couples and
property division, we mean two people, of either the opposite sex or the
same sex, who have lived together in a conjugal relationship for a period of
time. Second, unmarried or common law couples do not have the same
property rights as married couples.
Are married and unmarried couples treated the same?
Unlike married couples, there is no specific law in Alberta to deal with
property division for unmarried, or common law couples. There is no
presumption that property acquired by unmarried partners while they were
living together be shared equally when the relationship ends.
What is the rule for unmarried couples?
The rules in Alberta about property division for unmarried couples are very
uncertain. The general rule is that property acquired by a couple during
the relationship belongs to the party that paid for it and in whose name it is
registered. There are some exceptions to this general rule, such as:
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Canada Pension Plan (“CPP”) credits – where parties have lived
together for 12 consecutive months and then have been separated for
12 months, either party can apply to have to have the CPP credits built
up during the time they lived together divided equally between them.
Land in joint names – where parties have acquired land in joint names
(either as “joint tenants” or “tenants in common”) during the
relationship, either party may apply under the Law of Property Act for
an order physically dividing the lands, a sale of all or part of the land,
a division of the proceeds between the co-owners of the land, or a sale
of the interest of one co-owner to another.
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Equity – where parties have lived together for a significant period of
time and/or the circumstances of the relationship are such that it
would be unfair for one party to keep the property acquired during the
relationship, it may be possible to ask the Court to divide property in a
different way.
How do I have these exceptions apply to me?
If you have separated from your common law spouse or partner and you
would like to have any of these special rules apply to your property, you
should do the following:
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CPP credits – if you would like to equalize the CPP credits built up by
you and your common law spouse or partner during the time you lived
together, you can apply by contacting Social Development Canada
(http://www.servicecanada.gc.ca/eng/isp/pub/factsheets/credit.shtml)
Land in joint names – if you would like to put jointly owned land into
one party’s name alone, you can apply to the Court of Queen’s Bench
of Alberta by Originating Notice for an Order dividing the land or
changing the owner of the land.
Equity – if you would like to have the Court order an “equitable” (fair,
but not necessarily 50/50) distribution of the property acquired by you
and your common law spouse or partner during your relationship, you
can start a court action in the Court of Queen’s Bench of Alberta by
Statement of Claim. You will want to start a court action for unjust
enrichment, but because this is a very complex area of the law, you
should talk to a lawyer before you file any documents with the Court.
Unjust Enrichment
What is unjust enrichment?
As already mentioned, unjust enrichment is what you would claim if you
want to divide your property with your common law spouse or partner and
you think it would be unfair for the general rule to apply. In other words,
you think it would be unfair for your common law spouse or partner to keep
all the property paid for by him/her during the relationship and/or registered
in his/her name alone. Unjust enrichment is an equitable form of relief.
What this means is that you are asking the Court to do what is right and fair
in your case.
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How do I prove unjust enrichment?
Very often in common law relationships, one partner dedicates more time,
energy and money than the other to maintaining the household, raising the
children, and looking after the property. This generally allows the other
partner to dedicate more time to work. His/her salary can then go towards
paying down the mortgage, buying other assets, and even saving for
retirement. Although each partner has contributed to the relationship, only
one partner has made a financial contribution and only one partner has
acquired assets. The Courts have said that, in cases like this, there needs to
be some consideration given to the non-financial contribution of the other
common law spouse or partner.
If you want a Court to recognize your non-financial contribution to the
common law relationship, and make a property distribution based on unjust
enrichment, you must be able to show three things:
1. a gain by one party;
2. a loss by the other party; and
3. no legal reason for the gain or loss.
If you feel that your circumstances have these three things, then you may
be able to claim unjust enrichment against your spouse.
What are some examples of unjust enrichment?
Some examples of situations where one spouse or partner may have a claim
against the other for unjust enrichment are:
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Example 1 - Paul and Jane are a young couple in their 20s. They have
lived together for three (3) years in a house owned by Jane. Jane and
Paul each had their own cars before the relationship and did not buy
any property together. Jane worked as an accountant during the
relationship while Paul went to school full-time to become a chef. Jane
paid for the mortgage and paid all the bills. Paul spent his summers
fixing up the house – he built a garage, painted the house, and
renovated the upstairs bathroom. When Paul and Jane separate, they
would each get to keep their own cars. Because the house is in Jane’s
name, the house would belong to Jane under the general rule. Jane
would get to keep the increase in value of the house even though Paul
was the one who did all the repairs and renovations to the house. Paul
would get nothing from the house. If Paul made a claim for unjust
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enrichment against Jane, he may get some money from Jane for the
house.
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Example 2 – Simon and Claire have lived together for 12 years and
have two (2) young children together. Simon worked as a carpenter
and Claire has worked on and off as a retail clerk. Claire took about
six (6) years off from work to stay home and raise the kids. During
the relationship, Simon and Claire lived in the house that Simon
inherited from his father and he kept it in his name alone. Simon paid
for all the household expenses out of his salary and Claire’s money
went towards groceries and clothes and toys for the kids. Simon and
Claire bought a lot of furniture together for the house, but Simon paid
for it all. Simon also put a about $15,000 into his RRSP’s. Under the
general rule, Simon would get to keep the house, the furniture and his
RRSP’s. If Claire made a claim against Simon for undue hardship, she
may get some money out of the house, half of the furniture and half of
the RRSP’s.
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Example 3 – John and Mary have lived together for 25 years. Both of
them were in their late 40s when they met so they each owned their
own home, and had many other assets in their own names when they
started living together. Mary sold her house to move in with John 25
years ago and the house stayed in John’s name. In the early years,
Mary cooked and cleaned and looked after the house while John
worked. When John retired, they sold John’s house and bought a
cabin and a boat together in John’s name. They also bought a very
expensive apartment in the city in Mary’s name. Eventually, Mary got
sick and John had to look after her and the apartment. When John
and Mary separate, John would get to keep the cabin and boat and the
other assets he has in his name and Mary would get to keep the
apartment and the other assets she has in her name. Because of the
length of their relationship and the contributions each party made to
the other, this may not be a fair way to divide their property. As a
result, each party may be able to claim unjust enrichment against the
other and try to get a more equitable distribution of the property.
Conclusion
There are a lot of circumstances when it may not make sense to apply the
general rule of property division for unmarried couples. Using the law of
equity to claim unjust enrichment may be the only fair way to divide a
common law couple’s property. But, this can be very difficult because this
area of the law is not written down and it can change depending on the
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specific facts of each case . This handout is intended for information
purposes only and, as such, provides just a brief overview of the steps and
rules for dividing property between common law spouses or partners. If you
think that you may be able to claim unjust enrichment in your situation,
protect yourself by speaking with a family law lawyer.
This publication has been prepared by Family Justice Services, and provides
general information about the law as of the date it was written. It is not
intended to provide you with legal advice. If you want advice on your case,
speak to a lawyer.
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