Embarking on purchasing property with your significant other is an exciting milestone for any couple. In today’s society, it is becoming more common for couples to purchase property together and live together before or without tying the knot. Therefore, individuals in an adult interdependent relationship (or those living “common-law”) should be mindful of the unique legal considerations that may apply to them when making such a big decision to be well-informed of joint homeownership’s legal, financial, and personal implications. 

This blog post will explore the legal landscape surrounding property ownership for couples who are not married in Alberta. Whether you are considering buying your first home together or investing in real estate as a committed partnership, you must be aware of the legal framework that governs property ownership in Alberta and how your rights may be impacted in the event of a breakdown in the relationship.

What You Should Know Before Buying Property With Your Partner

While discussions of cohabitation and property ownership are exciting for many couples, it is important to consider the potential consequences that may arise in the event of a dispute or relationship breakdown. According to the national census data, approximately 23% of couples who live together are unmarried. As such, it is important to contemplate various legal and financial considerations before making such a significant decision.

Become familiar with the legislation 

Like other jurisdictions, Alberta has specific laws governing property ownership, rights, and obligations for couples who are not married but live together as a committed partnership. In Alberta, the rights of unmarried couples in an adult interdependent relationship are governed by the Adult Interdependent Relationships Act, with property division rights outlined in the Alberta Family Property Act. In most cases, there is a presumption that both partners are entitled to an equal division of the property they each acquired during the relationship. However, an adult interdependent partner may apply to the court for a family property order if a dispute arises over property division. As such, it is important to take proactive steps, such as consulting with a lawyer, to become familiar with your rights and responsibilities, allowing you to make informed life decisions. 

Decide how you want to take title

Regarding legal property ownership, you and your partner may choose to take title as “joint tenants” or “tenants in common.” These types of ownership are outlined under section 8 of the Alberta Law and Property Act. 

Under joint tenancy, both parties own the whole property, and the law views joint tenants as single owners. The right of survivorship also applies to joint tenancies. On the other hand, if you take title as tenants in common, each person has an interest in the property and maintains their ownership separately from the other owner(s). Alternatively, the property may be registered under only one partner’s name, meaning they have all legal rights to the home, even if the other partner is a co-signatory on the mortgage. 

When both names are on the title to a property, it can be easier to demonstrate joint financial interests and responsibilities regarding matters such as tax filings. However, it may also complicate some situations, especially if one partner has significantly more assets or debt. Conversely, if only one partner’s name is on the title, the other partner’s legal rights to the home’s equity may be impacted. As such, it is important to also consult with a tax professional who can advise on the key considerations that may impact your decision-making and financial planning.

Determine financial commitments and expectations

When deciding on a mortgage structure and financing, it is important to consider whether you and your partner will submit a singular or joint mortgage application. When making such a large investment, contemplating variables such as qualification, interest rates, and potential challenges is important. 

It is also important to encourage and facilitate open conversations about how you will manage additional property-related financial responsibilities, such as property taxes, utilities, and other expenditures. Having discussions early on about income disparities, contribution expectations and lifestyle choices can ensure early transparency and mitigate future financial disputes.   

Prepare a Cohabitation Agreement

While it is not necessarily an easy topic of discussion, talking to your partner about getting a cohabitation agreement can ensure that you are both protected if the unexpected happens. Because the property rights of unmarried couples and those in an adult interdependent relationship are accompanied by unique nuances, having a cohabitation agreement in place can address particular rights and obligations important to you and your partner, particularly regarding jointly owned property. By working with a trusted family law lawyer, you and your partner can ensure that your cohabitation covers several key components of your property, such as:

• The type of property ownership; 
• The percentage of the property that each person owns; 
• Financial responsibilities and consequences of failing to fulfill such obligations; 
• A dispute resolution process; and
• A buyout agreement.

By entering into a comprehensive cohabitation agreement, you and your partner can have peace of mind knowing that your rights, interests and investments are protected, minimizing the risk of potential conflicts and future litigation.

Contact the Lawyers at Getz Collins and Associates for Assistance With Property Purchases 

At Getz Collins and Associates, our talented real estate and family lawyers can help ensure your transaction goes smoothly. Whether you are considering buying your first home with your partner or have questions about preparing a cohabitation agreement to protect your financial investments, our firm provides a broad range of services to suit your needs. With offices in Calgary and Strathmore, our lawyers work with clients throughout the province. To learn more about how we can assist you with your next property purchase, please contact us by phone at 587-391-5600 or contact us online.