Rights of Common Law couples in Alberta
Alberta Common Law Property Key Factors
There are many myths and rumours about what the laws in Alberta are when it comes to common law relationship and common law property. A common law relationship is one where people live together as a couple but are not legally married. Common law property, in Alberta, is the property that these couple own. When common law relationships end, the division of debts and assets can become a point of disagreement. The following are the Top Ten Things to Know About Common Law Property in Alberta.
1) Treatment of the Division Of Matrimonial Property and Division Of Common Law Property is now the same in Alberta.
BUt…. only if you Separated after January 1, 2020 as long as you pass a certain threshold “test”. In Alberta, we use the Family Property Act to divide property for people who are married or are common law and separated after January 1, 2020. For common law couples that separated prior to January 1, 2020, or do not meet the threshold ‘test’, we apply the common law principles of Constructive Trust and Unjust Enrichment.
2) There is NOT a minimum time before the partner you live with has an interest in your property
It is a common misconception that there is a magic time frame that you must be living with your partner to be considered common law. There is a similar idea that a specific time must go by for a person to have an interest in your property once a breakup occurs (ie. 6 months, 1 year or 3 years). In Alberta, you or your partner may have a claim to each others’ property after living together for as little as one day. Learn about the Myths on When Common Law Relationships Start. This is a MUST READ if you are living with someone or thinking of living with someone. If a partner moves in and contributes financially to the other’s property, that may require compensation or repayment of some form. Each case is dependent upon the facts and specific circumstances.
3) The New Family Property Act is a Big Deal for Common Law Couples
For couples that separated before January 1, 2020, dividing their property is based on judge’s decisions from the past and application of a Constructive Trust principle. How it will be treated by the law is highly dependent on the facts of each case. Unfortunately, itis very hard to predict how a court will divide common law property for these couples. It’s is truly a case by case analysis of contributions made and roles taken by each party in the relationship.
For couples that separate after January 1, 2020, Alberta’s new Family Property Act outlines how we divide common law property. Parties will now be treated like married couples if they meet the threshold test of 1) they have been living together for three years or 2) if a child has been born while they are living together.
It is more important now than ever before that couples be extra careful to protect their assets with a Cohabitation Agreement if they are going to live together.
4) The Common Law Relationship Test for Unjust Enrichment
For parties that separated before January 1, 2020 or fail to meet the threshold ‘test’, we apply the principles of Constructive Trust and Unjust Enrichment. The test for Unjust Enrichment is an asset by asset analysis. In this test you must prove that you ‘contributed’ to each specific property (asset) in question, to your ‘detriment’, and that there is ‘no reason’ (ie. A cohabitation agreement, for example) that justifies you not receiving a portion of your partner’s property due to your contributions. A common law partner’s contribution may be cash, other value or “sweat equity”.
5) The Test for the Joint Family Venture
For parties that separated before January 1, 2020, we also consider if they were in a joint family venture. The test for Joint Family Venture involves you essentially proving that you were ‘marriage like’ throughout your relationship and, as a result, all of the assets are to be grouped together with you receiving a financial benefit from the growth of all of them. This test is a question of fact which is determined by assessing all of the relevant circumstances, including, but not limited to the mutual efforts of the couples, how economically integrated they were, their intentions of the relationship and any sacrifices they made for the family unit.
6) Cohabitation Agreements Can Protect You Before Problems Come Up
You can have a lawyer assist you in drafting a Cohabitation Agreement that will dictate how your common law property will be divided if the relationship ends. A Cohabitation Agreement is the best way to ensure both parties know at the outset of a relationship how property will be shared with your common law spouse if a breakup occurs. Learn about how cohabitation agreements protect couples.7) Common Law Property is Now Divided Equally
Once you meet the threshold ‘test’ of living together for 3 years or having a child of the relationship, the common law property is then treated like matrimonial property, there is now a presumption of equal sharing of assets accumulated during a common law relationship in Alberta once you pass the threshold ‘test’. There are several exceptions for certain property, but Courts will divide all property equally that was accumulated.
8) You Only Have TWO YEARS from The Date of Separation to Claim Against Your Partner’s Assets
You must file a claim within TWO years of separating in order to bring a claim against common law property that your former common law partner has.
9) You Only Have TWO YEARS From The Date of Separation to Claim Against Your Partner’s Assets
You must file a claim within TWO years of separating in order to bring a claim against common law property that your former common law partner has.
10) There are Steps You Can Take to Protect Assets That You Are Not On Title For
If you are not on title to the property, there are steps you can take to secure your interest in the property. Once a claim against your partner’s property has been filed in court, notice of that claim can be filed on title to the property. This is also known as a Certificate of Lis Pendens (CLP). This certificate gives other parties notice that you are advancing a claim and seeking an interest in the property.
Bonus: You Do Not Need to be on Legal Title (property or assets) to Have an Interest in the Asset on a Relationship Breakdown
The common law essentially creates an interest in your partner’s assets for you, if you can prove you have met one of the legal tests outlined by the case law in Alberta. You do not have to be registered as an owner to have an interest in the asset.
Learn More About Common Law Relationships & Property Division Today
Book a consultation with one of the Family Law Lawyers at Kahane Law Office in Calgary today. You can discuss how this information applies to you and your situation. A consultation will help you avoid falling into the many pitfalls that exist when maneuvering the complicated issue of common law property in Alberta. They are available at reasonable flat rates. There is no further financial obligation if you do not want to move forward. A consultation will allow you to understand your position of what you are entitled to and what you are responsible for.
If you want one of our lawyers to prepare a Cohabitation Agreement on your behalf to help avoid future problems, call or email today.
To schedule a consultation with a member of our family law team to discuss your common law relationship, entitlements, and any obligations, or if you want a cohabitation agreement drafted please contact our experienced team at Kahane Law Office. You can reach us locally in Calgary at 403-225-8810 or toll-free at 1-877-225-8817, or email us directly here.