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What is the process for dividing property in a common-law relationship?

In Ontario, Canada, the process for dividing property in a common-law relationship differs from that of married couples. Common-law couples do not have the same automatic property rights as married couples.

However, there are legal principles and processes that govern property division in common-law relationships. This article provides an overview of the process for dividing property in a common-law relationship in Ontario, organized under relevant headings.

1. Understanding Property Ownership

In a common-law relationship, property ownership is generally determined by individual contributions. It is important to establish and clarify the ownership of each asset, including real estate, vehicles, bank accounts, investments, and personal belongings. Understanding the initial ownership of the property is crucial when determining the division process.

2. Shared and Jointly Acquired Assets

While property ownership is generally determined by individual contributions, common-law couples may still acquire assets jointly or have shared assets. It is essential to identify assets that were acquired jointly during the relationship, such as joint bank accounts, joint investments, or shared real estate. These shared assets may be subject to division.

3. Establishing a Claim for Property Division

In Ontario, common-law partners may be entitled to a share of property if they can establish a claim of unjust enrichment or a constructive trust. Unjust enrichment refers to situations where one partner has derived a benefit at the expense of the other partner without a legal or contractual justification. A constructive trust arises when it would be unfair to allow one partner to retain the entire value of a property to the exclusion of the other partner.

4. Negotiation and Agreement

Common-law couples have the option to negotiate and reach an agreement on the division of property without resorting to court intervention. This can involve discussions about how assets and debts will be divided and the allocation of any shared or jointly acquired property. It is advisable to seek legal advice during the negotiation process to ensure that the agreement is fair, comprehensive, and legally enforceable.

5. Mediation and Alternative Dispute Resolution

If the couple is unable to reach an agreement through negotiation, they may consider mediation or alternative dispute resolution methods. Mediation involves working with a neutral third party who facilitates discussions and assists the couple in finding mutually acceptable solutions. The mediator does not make decisions but helps the couple reach their own agreement. Alternative dispute resolution methods can be less formal and adversarial than court proceedings.

6. Court Intervention

In situations where negotiation and alternative dispute resolution methods are unsuccessful, one or both partners may choose to seek court intervention. To initiate the court process, one partner can file an application with the court seeking a division of property. The court will consider factors such as the length of the relationship, contributions made by each partner, and any economic disadvantages suffered by either partner.

7. Legal Proceedings and Resolution

If the matter proceeds to court, each partner will present their case and provide evidence supporting their claims. The court will evaluate the evidence and apply relevant legal principles to determine the division of property. It is important to note that court proceedings can be time-consuming, costly, and may result in an outcome that may not align with the expectations of either partner.

8. Legal Assistance

Seeking legal advice from a TCZ Law in common-law property disputes is highly recommended. TCZ Lawyer Eric can provide guidance on legal rights, help navigate the negotiation or court process, and work towards achieving a fair and equitable division of property. Our legal professionals can assist in preparing the necessary documentation, presenting arguments, and advocating for the client’s interests.