Cohabitation Pitfalls: What Happens to Property When You Split?

In Ontario, the law draws a sharp line between married spouses and unmarried cohabiting partners when it comes to property rights.

No Automatic Property Division for Common-Law Couples

The property division scheme in the Family Law Act applies only to married spouses. When a common-law relationship ends, each partner generally keeps the assets registered in their own name. Unlike married couples, there is no statutory right to share in the division of property no matter how long the couple has lived together.

Instead, common-law partners must turn to equitable remedies, including:

• Unjust enrichment – where one partner benefits unfairly at the other’s expense;
• Constructive trust – where the court recognizes contributions, financial or otherwise, made to property legally held in the other partner’s name.

Protecting Rights Through Cohabitation Agreements

Unmarried partners who wish to protect their rights can do so by entering into a cohabitation agreement. Under section 53 of the Family Law Act, these agreements can set out:

• Ownership and division of property,
• Financial responsibilities during the relationship, and
• Rights upon separation or death.

Importantly, if the couple later marries, the cohabitation agreement automatically becomes a marriage contract.

When Courts Step In: Equitable Remedies

Where no cohabitation agreement exists, courts may intervene using equitable principles. To succeed in an unjust enrichment claim, the claimant must establish:

1. Enrichment of the other partner,
2. Corresponding deprivation suffered by the partner, and
3. No juristic reason (such as gift or contract) for the enrichment.

Courts also assess whether the couple engaged in a “joint family venture”—a relationship defined by mutual effort, economic integration, and interdependence. Where this is found, remedies may include monetary awards or a share in specific property.

Case Reference Risto v. Marcelais

The Ontario decision in Risto v. Marcelais (2014 O.J. No. 1466) illustrates how these principles are applied. The court recognized that both parties made intertwined contributions—financial and non-financial—that allowed them to accumulate wealth during their cohabitation.

Key Takeaways

• Common-law partners in Ontario do not share the same property rights as married spouses.
• Property division under the Family Law Act applies only to married couples.
• Cohabiting partners must rely on cohabitation agreements or equitable remedies such as unjust enrichment and constructive trust.
• Courts assess claims on a case-by-case basis, looking for evidence of contribution, deprivation, and interdependence.
• Estate planning is crucial, since intestacy laws do not provide inheritance rights for unmarried partners.