Buying a House with Mr. Maybe

Cohabitation - Mr. Maybe

Cohabitation - Mr. Maybe

Living together (cohabitation) is not always an antecedent to marriage. But buying a house with Mr. Maybe differs from sharing a basement apartment with your college boyfriend. How do you protect yourself if you’re ready to commit to a house—but not to your partner?

First, understand that your rights and responsibilities in a common-law relationship will depend on which province you live in. In Ontario common-law couples are treated like roommates: there is no automatic right to property division when the relationship ends, and ownership follows title. Of course, every rule deserves an exception.

Mr. (or Mrs.!) Maybe may have an equitable interest in your house even if, at least on paper, you are the only owner of the property. Equity means fairness: it is the law that addresses situations where traditional remedies fail to help people who deserve justice. Equitable remedies are also discretionary, so a person who wants help in equity must show that he or she deserves it.

What if a common-law couple breaks up, but one person owns the house, and the other person wants part of it? The person who does not own the house may apply to the court for help using the equitable doctrine of unjust enrichment. A person who wants help because of an unjust enrichment must show the court three things:

  1. That somebody else received a valuable benefit;
  2. That the person making the claim suffered a corresponding deprivation; and
  3. That there was no juristic reason for the other person to keep the benefit.

“Juristic reason” simply means a reason based in law. Mr. Maybe cannot recover against you if you can show a juristic reason for keeping the benefit(s) you received from him, such as a gift or contract.

The court will usually correct an unjust enrichment by awarding money. The court can give more or less money depending on what would be fair in the circumstances. For example, in King v. Andrews Mr. Maybe (Mr. King) succeeded in his claim for unjust enrichment.[1] In that case the court decided that Mr. King should receive $5,000.00 from Ms. Andrews because he did a lot of work that increased the value of her cottage when they lived together. Even though Mr. King did not expect to be paid for his work, he did expect to use the cottage, and he could have spent his time working on other projects. The amount of money the court awarded Mr. King was a fair reflection of the value of the work that he did on Ms. Andrews’s cottage.

In another case, Jackson v. McNee, the court gave Ms. Jackson half of all of Mr. McNee’s assets, even though Mr. McNee owned almost everything and Ms. Jackson didn’t work.[2] Ms. Jackson and Mr. McNee lived together in a common-law relationship for eighteen and a half years and they had three kids. The court realized that Mr. McNee gained a valuable benefit from Ms. Jackson: if she did not stay home with the kids, he could not have gone to work and made so much money. Ms. Jackson suffered a corresponding deprivation because she stopped going to school and lost the opportunity to get a job and make money.

Even though Mr. King and Ms. Jackson each received an award under the doctrine of unjust enrichment, you can see that the court treated their cases very differently. Mr. King only received compensation on a “quantum meruit” basis, or a reasonable amount of money for the work he did on the cottage. Ms. Jackson, on the other hand, got half of everything Mr. McNee owned. This result makes sense. Ms. Jackson contributed more value to Mr. McNee’s property during their relationship than Mr. King contributed to Ms. Andrews’s property. She also suffered more as a result of making this contribution. She deserved more.

Living “common-law” is not the same as marriage. The equitable remedies that protect common-law couples when their relationships end apply equally to people living together as roommates. The practical difference is that the more entwined a couple’s financial worlds become, the more closely their lived reality resembles the sharing and teamwork that takes place in a traditional marriage, and the greater their equitable remedies will likely be if they break up.

Litigation is costly and unpredictable. Some common-law couples use cohabitation agreements to protect themselves in case they break up. Cohabitation agreements usually cover topics like the division of property and spousal support. Each agreement can be customized to reflect the individual needs of the couple. These agreements also help manage the couple’s expectations and avoid the cost and uncertainty of going to court.

References and Footnotes

  1. King v. Andrews 1992 CarswellOnt 547.
  2. Jackson v. McNee 2011 ONSC 4651.
Hummingbird Lawyers

Hummingbird Lawyers strategically assists businesses and individuals in the areas of corporate law, commercial and residential real estate transactions, wills and estates, employment law and commercial and family law litigation.

Be first to comment