When buying property as a couple, it's better to be safe than sorry. Our brokers offer several tips to help you manage your assets respectfully and without surprises.

Bylaws and agreements

There are different legal statuses for couples. The distinctions between couples who are married and those living common-law have a direct impact on how they manage their finances.

Living common-law

Common-law partners are two people who live together, are in a conjugal relationship, and are not married. Their situation corresponds to at least one of the following criteria:

  • They have lived together in a conjugal relationship for at least 12 consecutive months.
  • They have a child together, either biologically or through adoption.

The major difference between a married couple and a common-law partnership is the division of assets upon separation. By law, a property owner has no obligation to their former partner if they wish to sell, give away, or keep their property. However, there are measures in place to establish a framework in the event of a separation between partners.

When buying a property together, it's a good idea to have a notary help you specify each person's share of the down payment in the deed of sale. This will make it easier to split any profit if you sell the property later. If you both sign the deed of purchase as co-owners, you can ensure that you're making the decision together. Another useful document is an ownership agreement, which outlines each person's financial contributions, what happens if you separate, and how to resolve any disagreements (e.g., through mediation).

Purchasing as a couple

Written Agreements Between Common-Law Couples

In Quebec, a contract between couples is a tailor-made document designed to meet the specific needs of couples living in a common-law relationship. It must accurately reflect the wishes of the partners. It is therefore strongly recommended to consult a notary or lawyer for its creation.

Why is a cohabitation agreement important?

A agreement allows you to define your own rules and plan for the consequences of your union, particularly in the event of a separation. It provides legal and financial security for both partners.

What can be included in a agreement?

  • The division of responsibilities and contributions of each partner during the relationship;
  • The assets and debts that each partner has at the beginning of the relationship;
  • How to divide shared assets in the event of a breakup;
  • How debts will be repaid in the event of a separation;
  • In the event of a separation, the agreement can include provisions for one partner to pay the other a sum of money, similar to spousal support. This amount can be paid as a lump sum, in installments, or through the transfer of property;
  • A plan for updating your agreement if circumstances change for either partner after you've gone your separate ways.

If a common-law partner dies, and the deed of sale is in both names, does the surviving partner automatically inherit the deceased partner's share of the property?

Not necessarily. Even if you both signed the deed of sale for the house, the surviving partner won't automatically inherit the deceased partner's share. To ensure this happens, you'll need a notarized will in place.

Becoming homeowners together

Married couples

According to the family patrimony rule, in the event of a divorce, assets are divided between the two people regardless of who was the owner. It is possible to choose the type of asset division according to the context of property acquisition. Additionally, inquire about the declaration of family residence at the Land Registry to better understand your real estate protection.

Once again, it is important to have a notarized will.

Property ownership

The best way to ensure you receive your fair share of the real estate assets in the event of a separation is by becoming a co-owner. Moreover, it is the only way to have the sale canceled if your ex-partner wishes to sell without your consent. Some may believe that the acknowledgment of debts or the cohabitation agreement offers decision-making power, but this is false. These documents offer the possibility of taking legal action for compensation in a situation of sale without consent.

To properly prepare for any eventuality, common-law partners, like married couples, have every interest in informing themselves and planning the management of their assets to avoid the risk of financial insecurity later. A legal professional, such as a notary or a lawyer, will advise you on the real estate asset management methods best suited to your situation.

Looking to buy a new property? Contact one of our real estate brokers today. They will be able to assist you with all your projects!

Source of the article : Éducaloi