House Buying and Marriage: Debunking 5 Family Law Myths as it Relates to Property

SKRealEstateLaw Marriage Blog FI

It would be no surprise to folks that relationships do not always last.  Despite that knowledge, our brain gets all gooey when it comes to ‘my Love’, ‘my Snookums’, or ‘my Cuddle Cakes’1 and we do not to take steps to protect our assets. 

If you and your significant other are moving into a home together, you should consider the family property implications of that decision.  It is even more important if you are not yet married, and you are starting the clock on that ambiguous legal phrase ‘common law’.  There are a number of steps that can be discussed with a family law lawyer to determine a fair and equitable way to protect assets.
I have so many clients that come into our real estate meeting and they are filled with misinformation about their legal rights and responsibilities.  Armchair lawyers or Google has provided them with information that is often wrong, or not applicable to Saskatchewan.  Here is my attempt to set you down the right path (and hopefully towards your lawyer to get some answers specific to your situation).
Myth #1 – “We become common law spouses after [insert time frame here]”
Truth: Different legislation imposes differing time frames or conditions on identifying when people are considered ‘common law’ spouses. 
The most important question is to identify why you need to know if you are spouses, so that you can find out the relevant time frames.  There are a number of provincial and federal pieces of legislation that will define when common law spouse obligations commence. 
For real estate located in Saskatchewan, we are likely looking at the Family Property Act, which directs how to divide property upon marital breakdown.  One of the five subdefinitions of ‘spouse’ under that Act includes someone who “is cohabiting or has cohabited with the other person as spouses continuously for a period of not less than two years”.  As you will see below, that definition is anything but simple. 
Myth #2 – “We only become common law spouses when we start living together”
Truth: There is a multipart test that is used to see when the time frame has started and continued.  Small breaks in the relationship, living in different towns or any number of different fact specific anomalies may still satisfy the test.  If the test is satisfied, the legislation can impact your assets after break up. 
The test described under Myth #1 may seem simple, but it is not.  When courts are called to interpret legislation, those decisions assist lawyers and other practitioners understand how to apply the legislation.  One helpful decision came from the Saskatchewan Court of Appeal in Romanchuk v. Robin, 2003 SKCA 50 (CanLII) 2 where they identified seven factors, with a number of subquestions that would assist the court in figuring out if the legislation applies.  Needless to say, it’s not just when you change your mailing address at your bank.  Talk to your lawyer to understand the best way to apply the legislation.
Myth #3 – “It is my house, so I am the only one who needs to sign papers for it”.
Truth: Probably not.  If you have used the property as a homestead at any point in your relationship, the non-owning spouse will likely need to sign a consent, and that will need to be accompanied by a certificate of independent legal advice.
The Homestead Act is a form of consumer protection legislation that has its roots in the early 20th century.  It was put into place to protect spouses who do not own their homestead, by requiring that any transfer, mortgage or agreement for sale require the consent of that non-owning spouse.  A homestead is property that is or has been occupied by both spouses as the family home at any time during the marriage.
If you have dealt with this requirement through court order, or a specific type of agreement, then this consent may not be necessary. There is also some time requirements related to when you end your relationship with your former common law spouse.
If you are selling or refinancing, your lawyer will take care of it.  Just make sure to let him or her know that you are married, and that your spouse is not on the title.  (Although your lawyer should ask!)
Myth #4 – “I paid the downpayment on the house/it is in my name, so it is mine.”
Truth:  Probably not.  The ‘family home’ as described by the Family Property Act in Saskatchewan is presumptively divided in half.  In a lot of cases, it just won’t matter who paid for the property if you have not sorted it out by agreement in the form contemplated by the legislation. 
The court may intervene in situations where that division is “unfair and inequitable to do so, having regard only to any extraordinary circumstance” or unfair to the parent with custody of the children, but that is another complicated legal analysis and a fairly high burden. 
Even if it is not a family home but rather an investment property, there is a detailed legal analysis that needs to go on to see how the asset is going treated as part of the division of family property.  Assets are split, but subject to a number of exceptions and exemptions under the legislation.  These types of issues are where lawyers earn their fees and help you understand how the legislation applies.   
Myth #5 – “The agreement we downloaded off the web on splitting the house we bought is that we signed just as good as one from a lawyer’s office”
Truth: Nope. For a property agreement to be binding, it needs independent legal advice provided to each party.  Any other agreement can be taken in consideration by a court, but only to whatever weight the court feels is reasonable.
Lawyers tend to be quite skeptical of agreements that you have pulled off the internet and used without modification.  Often, the agreements are for other countries or jurisdictions, and the language just doesn’t work for the situation that you find yourself in.  The language matters, and these agreements often do not cut it for how they are being used.
However, with interspousal contracts under the Family Property Act, it is even more essential that each party talk to a lawyer and receive independent legal advice.  The legislation requires this step in order for the agreement to be binding (subject to the provisions of the Act).
Takeaway:  This stuff is complicated, folks.  If you need a recommendation for a family law lawyer, make sure to give me or your lawyer a call.  We can direct you to some great people. 
References:
1 I got that last one from this amazing article: http://www.cutepetname.com/cute-pet-names-for-your-boyfriend/
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