Common Law spouses vs Married Spouses - what is the difference?

Many people misunderstand the differences between the rights and obligations of married spouses, as opposed to 'common law' spouses.

In Ontario, being 'common law' is defined as two persons who are not married to each other and have cohabited either (a) continuously for a period of not less than three years or (b) are the parents of a child together in a relationship of some permanence.

Being a common law spouse does not automatically entitle you to the same division of property that married spouses have.  Married spouses have a legislated right to 'equalization' of net family property. Common law spouses have no such automatic right, but may have other types of claims available to them to address property disputes.

Since the law created a new type of claim called a “joint family venture” it has become more difficult (and costly) to determine what entitlement a common law spouse may have to property built up during a relationship.

For all of these reasons, we recommend entering into a “cohabitation agreement” or “marriage contract” (more commonly known as a “pre-nup”) at the outset of the relationship, which determines what will happen with property and support, upon a breakdown of the relationship.

If you are separating and need assistance making your way through the process, or are entering into a relationship and need help preparing a contract, please give us a call.

Why Do You Need a Will?

In Ontario, if you die without a Will, most people assume that your assets will automatically go to your spouse. However, this is only true for a portion of the assets. The balance are shared between the spouse and any children. There is also a lot of administration involved in the administration of resolving estates with no Will.

It is really important to get a Will done, and ensure your beneficiaries are appropriately designated on any policies of life insurance, investments and/or that your accounts and property are owned jointly with your intended beneficiary (where applicable). This will cut out a lot of “red tape” for your surviving spouse in what is already a difficult time.

Sometimes we hear from clients that “they don’t have anything” so why spend money to get a Will? This is simply not true. Even if your estate is as simple as a bank account, a car, and personal effects, you need to ensure your survivors have the authority to handle the wrapping up of those items. To ensure this is properly done, you need a Will.

Thanks, Barrie Ontario!

We are honoured to have been serving Barrie at Ewen Boyd LLP for the last 3 years! Prior to opening our own law firm, John Ewen and Laura Boyd worked at various other Barrie law firms, and saw a niche for a “boutique” style firm providing customized and hands-on service to clients. We are looking forward to continue helping residents of Barrie and surrounding areas with their legal matters, and would be happy to speak to you regarding your real estate, family law or simple Wills and Estates files.  

Why Do I Need Title Insurance?

We get a lot of questions about Title Insurance. What is it and why do you need it?

In recent years, it has become the norm to order a policy of title insurance when a client is purchasing a property.

Taken from Stewart Title’s website www.stewart.ca, title insurance covers:

  • someone else owns an interest in your title
  • existing liens against the title
  • violations of municipal zoning by-laws
  • encroachments onto an adjoining property (other than fences and boundary walls)
  • setback violations
  • realty tax arrears
  • outstanding municipal utility charges, provided such charges form a lien on title
  • existing work orders
  • lack of legal access to the property
  • unmarketability of the land due to adverse matters that would have been revealed by an up-to-date survey / RPR / Building Location Certificate
  • fraud, forgery and false impersonation to the extent they affect the validity of title

A prudent lawyer will search title to ensure that there is nothing obvious to be concerned about, however, in many instances, there is not enough time to perform certain searches due to the quick closings we are seeing these days. In our experience, the most common title insurance claim is for arrears of property taxes (where the Vendor certifies that the taxes are paid up to date, but in fact they are not). A quick title insurance claim will usually resolve this issue, and the taxes are paid up by the insurer. You own the policy for the whole time you own the house.

Generally, If you are purchasing a property and are obtaining mortgage financing, the lender will require us to order a policy of title insurance. We think it represents good value for money for the extra security to know that your title is protected for your whole ownership of the home.

Some Hints From a Real Estate Lawyer to Help the Process go Smoothly

We seem to get a lot of the same questions about the process of buying or selling. Here is a quick summary of important points to be aware of when you are buying, selling or refinancing a house:

1.      You will have to meet with your lawyer in person. Most lawyers have a limited number of 'after hours' appointments and generally will need to see you during the day. Please ensure you will be able to attend your lawyer’s office a couple days prior to closing to sign the paperwork. A scramble to book an appointment at the last minute is unnecessarily stressful for everybody.

 

2.      Ensure the bank sends your real estate lawyer the “mortgage instructions” in a timely fashion (as far in advance of closing as possible). This allows us to complete the paperwork required and to advise you of the funds you will need to bring in for closing.

 

3.      We don’t often know the amount of funds you will be required to bring into our office for a closing until a couple of days prior to the closing date. We will let you know as soon as this is available, but it is based on information from a number of sources, and sometimes we don’t have all the information far in advance of the closing.

 

4.      The timing of the closing depends on a number of factors. Everybody wants their key as early as possible, and we always strive to achieve that. But it does depend on both the buyer's and seller’s lawyers’ availability, together with the timing your bank sends mortgage funds to your lawyer.

 

5.      If you are selling, it is really helpful to ask your mortgage lender in advance, approximately what the penalty will be (if any) to 'break the mortgage'. We often see clients frustrated because they didn’t know there is a cost to break a mortgage early (where applicable);

 

6.      Banks are really worried about fraud these days, and rightfully so. We are seeing that most banks will put a hold on closing funds for a few days, even if the funds are certified from your lawyer. So if you need your sale proceeds immediately, you would be best advised to find out your bank’s policy on this, as it is out of the real estate lawyer’s control.

 

7.      Related to point 5, most banks do not accept Powers of Attorney for closing a real estate transaction. If you want to have a Power of Attorney act for you to buy or sell a house, there needs to be a good reason and “convenience” doesn’t usually cut it. Most banks will scrutinize the use of a Power of Attorney very thoroughly and some won’t even allow the use of one. You should find this out ahead of making the arrangements to use a Power of Attorney.

 

We love helping clients in their real estate transactions and want the process to be smooth for you. If you have any questions about how we can guide you through a closing and make the process smooth for you, give us a call.

The Hidden Costs of a Real Estate Transaction

We have all heard that the real estate market in Barrie is booming! In anticipation of the spring market, let’s discuss some of the unanticipated costs of a real estate transaction:

Adjustments: If the seller has pre-paid expenses, the purchaser will have to reimburse for those on closing. Property taxes, fuel oil fill up, condo fees are some examples of line items that get adjusted on closing.

Land Transfer Tax: Make sure you determine the correct fee for this. Ontario has its own Land Transfer tax but if you are buying in Toronto, there is also an additional tax for the city. Some people qualify for a rebate. Ask your agent or lawyer to give you the correct amount of LTT payable.

Connection fees: There are often deposits required to set up new utilities accounts and to read meters on closing. Double check the cost of these to make sure you have enough $ set aside.

Home inspection: This is an extremely important step in buying a home. Fees vary but you could avoid some large expenses in the long run by arming yourself up front about issues with the home.

Penalties: If you are selling, your mortgage lender may charge a pre-payment penalty and a discharge fee. Contact your lender before deciding to sell, so you know what the penalties will be for paying out your mortgage.

Moving fees: Make sure to speak to your lawyer to understand when your key to your new home will be available before booking your moving truck. Movers can be expensive and you don’t want to have much wasted time on closing if it can be avoided.

Professional Fees: Generally, you will require a realtor, a mortgage broker/agent and a lawyer as well as other professionals such as home inspectors, and insurance agents. Confirm all the fees and out of pocket expenses for each, and be aware the Realtor’s commission is subject to HST in addition (many clients are surprised by this!).

Whether you are selling or buying, having a lawyer you trust and who is available to you during the process is important! Contact Laura Boyd or Dr. Brett Degoldi at Ewen Boyd (705-252-6730) if you need assistance with Real Estate in 2017. Most of all, best of luck in your new home!