Buying a Home With a Partner Before Marriage: Title Choices and Agreements

Couples often buy their first home together before they marry, and one partner frequently puts in more of the down payment. It is natural to assume that the title, or a note of who paid what, decides what happens if the relationship ends.

In BC, that depends on how title is held, whether and when you become spouses under the Family Law Act, and whether you have a written agreement. Sorting this out before completion is far easier than untangling it later.

Three questions that decide who owns what

When an unmarried couple buys together, the outcome if they separate usually turns on three things:

• How title is registered. Joint tenants or tenants in common, and in what shares.
• Whether you are, or become, spouses. Once the Family Law Act treats you as spouses, its property rules can override what title alone suggests.
• Whether you have a written agreement. A properly made agreement can set your own rules.

Choosing how to hold title

Under section 11 of the Property Law Act, when land is transferred to two or more people they are tenants in common unless the transfer shows a contrary intention. If the shares are not stated, they are presumed to be equal. Couples who want unequal shares therefore need to say so on the transfer, for example 60 and 40.

Many couples choose joint tenancy instead, so that the home passes to the survivor if one of them dies. Our article on joint tenants or tenants in common explains survivorship and the trade-offs. If you have contributed unequally, joint tenancy alone does not record that, so it is worth pairing with a written agreement.

When you become spouses, and why it matters

Section 3 of the Family Law Act says a person is a spouse if they are married, or have lived with the other person in a marriage-like relationship for a continuous period of at least 2 years. For the property division rules, having a child together does not on its own make you spouses; the 2 years still applies. Section 3(3) adds that the relationship is treated as beginning on the earlier of the date you began living together in a marriage-like relationship or the date you married.

That start date is the key for couples who buy first and marry later. Excluded property under section 85(1)(a) is property acquired by a spouse before the relationship began. If you were already living together when you bought, the relationship has usually already begun for this purpose, even if you marry years later. A home bought during cohabitation is therefore unlikely to be excluded under that heading.

Once you are spouses and you separate, section 81 gives each spouse a right to an undivided half interest in all family property, subject to an agreement or order that provides otherwise, regardless of who contributed what. Section 81.1 also says the presumptions of advancement and resulting trust, older rules courts used to infer who really owned property, must not be applied between spouses. A spouse who claims property is excluded must prove it.

If you have not yet reached the point of being spouses, the Family Law Act's property division rules do not apply, and ownership is decided under general property and trust law. Our article on separation for couples who are not married looks at that in more detail.

Unequal down payments: where the money went

Suppose, as an example, one partner contributes $100,000 from savings built up before the relationship and the other contributes $20,000. If those savings were used to buy a home after you moved in together, the home itself is acquired during the relationship. A spouse may still argue that part of the value is excluded because it derives from pre-relationship property, but that has to be shown with records, and under section 84(2)(g) any increase in the value of excluded property during the relationship is family property. Money from parents adds another layer: see our article on parental help with a down payment.

Putting it in writing

A written agreement is the clearest way to protect an unequal contribution. A cohabitation agreement made before or after you buy can say what each of you keeps if you separate. If you plan to marry, ask that it be drafted with that in mind. Our article on cohabitation agreements covers what they usually include.

For the agreement to carry the most weight under section 93, it should be in writing with each signature witnessed. Even then, the court can set it aside if a partner did not disclose significant property or debts, took improper advantage of the other's vulnerability, or the other did not understand it. It can also intervene if the agreement is significantly unfair, considering factors such as how much time has passed since it was made. Full disclosure and separate legal advice for each of you help an agreement hold up.

It also helps to review your wills at the same time, since unmarried partners are not automatically treated as spouses for estate purposes until they meet the legal test.

Buying together before you marry? Settle the ownership terms before completion

Our real estate lawyers can explain the title options, register your shares the way you intend, and work with our family law colleagues on an agreement that records your contributions.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.