Common Law: Increase in Value of Property During Common-Law Period

In Alberta, common-law relationships—referred to as adult interdependent partnerships in the family law context—carry many of the same emotional and financial implications as traditional marriages. As with traditional marriages, when these relationships end, dividing property can become complicated.

Prior to 2020, there was no legislation to govern the division of common-law property. The Family Law Act was then updated, and the Matrimonial Property Act was renamed the Family Property Act. This new act includes adult interdependent partners in the property legislation and, for some property, assumes a 50/50 division of property when a relationship ends.

If you are navigating a common-law separation in Calgary, it is essential that you understand the legal implications when the value of property increases. At Jones Divorce & Family Law, we know every situation is unique. We provide clarity and support to help you understand if and how the increased value of both your shared property and any property you have brought into the relationship will be divided.

Understanding Common Law Status in Calgary

Under Alberta law, you may be considered common law if you:

Have cohabitated for at least three years in a relationship of interdependence, or
Have a child together (whether by birth or adoption), or
Have signed an Adult Interdependent Partner agreement.

Similar to married couples, property can be divided 50/50, or there could be circumstances that warrant an unequal division of property. Partners must demonstrate their entitlement to a share in the property if it was owned by one partner prior to cohabitating.

Determining each partner’s rights can involve examining contributions, cohabitation agreements, and circumstances surrounding the shared property.

Equity in Property Division: Key Considerations

When determining the division of a property during a common-law separation in Calgary, the focus is on fairness, taking into account several factors, including:

Establishing the Original Value

If a property belonged to one partner before cohabitation, the initial value of the property can be critical. This value acts as a reference point to determine if and how much the property’s value has increased during the relationship.

Identifying Contributions

Whether financial or non-financial, it is essential to determine how each partner contributed to the property’s increase in value.

Financial contributions include mortgage or utility payments, renovations, or maintenance costs.
Non-financial contributions include work around the home, childcare, or any role enabling the other partner to invest in or improve the property.

Fairness vs Automatic Entitlement

No law guarantees the non-owner partner half of the property value. Instead, the courts will consider what is equitable by carefully evaluating each partner’s tangible and intangible contributions to the relationship.

Unjust Enrichment Claim

An unjust enrichment claim is a legal remedy applied when one person unfairly benefits at the expense of another. During a common-law separation in Calgary, you may seek an unjust enrichment claim if one partner seeks compensation for the shared home, for example.

To prove unjust enrichment, the applicant must show:

The respondent received a benefit
The applicant suffered a corresponding loss or disadvantage
There is no legal reason to justify the respondent’s gain

To determine if a legal reason for the claim exists, the court uses a two-step process:

First, the plaintiff must prove there is no just reason for the benefit.
If the plaintiff is successful, the defendant must then explain why they should keep the benefit, considering the circumstances.

During this second stage, the court will also evaluate each party’s reasonable expectations and public policy considerations.

Monetary Damages

If the court determines an unjust enrichment occurred, it will award monetary damages. If monetary damages are inadequate, the court may also grant proprietary damage through a constructive or resulting trust.

During a common-law separation in Calgary, monetary rewards can be calculated in two ways:

Based on the value of services provided (quantum meruit).
If the property is deemed a joint family venture—considering factors like mutual effort, economic integration, intent, and family priorities—the Court may award a share of the assets proportional to the applicant’s contribution.

Constructive Trust

When the court finds monetary damages insufficient to the claim, it may implement proprietary damages through a constructive trust. A constructive trust can be imposed regardless of the defendant’s intentions.

To prove a trust is appropriate, the applicant must show a clear link between their contributions and the property’s acquisition, preservation, maintenance, or improvement. That is to say, they must prove they contributed to the betterment of the home.

Resulting Trust

Although less common, resulting trusts are still recognized in Canada. A resulting trust occurs when one party provides purchase money for a property, even if it is held in another person’s name.

The Common Intention Resulting Trust is no longer valid law.

Dispute Resolution Options

Most common-law property disputes can be resolved without going to court. At Jones Divorce & Family Law in Calgary, we offer a number of services to help you through your common-law separation, including:

Negotiation and Mediation: This approach allows both parties to work together to craft a mutually agreeable resolution while minimizing stress and legal fees.
Collaborative Family Law: In this process, each party has a lawyer, and everyone agrees to work collaboratively. Collaboration focuses on open communication and problem-solving rather than confrontation.
Litigation: When alternative methods break down, litigation may be necessary. A judge will review the facts of the case, including contributions, original ownership, and any agreements, to determine a fair division.

Common Pitfalls and How to Avoid Them

Assuming You Are Entitled to Half

Even if you have lived together for several years, entitlement in the event of increased value depends on specific evidence of contributions and the nature of the relationship. Contact a Calgary lawyer to discuss your common-law separation and understand your rights.

Overlooking Non-Financial Contributions

Never underestimate the value of non-financial contributions. Even if your partner was the primary breadwinner, childcare and household duties may still be considered in the case of an increase in property value.

Failing to Seek Legal Advice Early On

Common-law separations can become complicated—speaking to a Calgary lawyer early in the process can help you avoid unnecessary stress and safeguard your rights.

Trusted Calgary Lawyers Helping You Navigate Your Common Law Separation

Common law separation in Calgary can be complex, particularly where property is concerned. At Jones Divorce & Family Law, we are here to help you navigate the process as efficiently as possible to ensure your rights are protected.

Contact Jones Divorce & Family Law for more information or to book an appointment with our trusted and experienced separation lawyers. We are here for you.

Frequently Asked Questions

Who gets the increase in value in our home after a common law separation?

If both common-law spouses are on the title, the increase in home value is likely to be shared equally if the home was acquired during the relationship. If one spouse wants to keep the house, they will need to buy out the other spouse for half of the fair market value of the house, subject to any adjustments for exemptions or distribution of other assets.

If only one common-law spouse is on the title and the property was acquired during the course of the relationship, the increase in value is likely still shareable in some fashion as family property, subject to any adjustments for exemptions.

If the property was not acquired during the relationship, you’ll want to consider whether you have an exemption claim on that property. If the property is exempt, the increase in value will still potentially be divided between the parties on a just and equitable basis.

How are assets divided in a common law relationship?

Common-law couples who have separated after January 1, 2020, will move forward with an equal division of Family Property, subject to exemptions and other factors for consideration. Common-law couples who separated before January 1, 2020, will need to explore whether or not a trust claim should be made for a property accumulated during the relationship.

What if my name isn’t on the title?

You may still have a claim if you can prove tangible or intangible contributions that increased the property’s value. Another consideration will be when the property was acquired—if it was acquired during the relationship, you may have a claim for a 50/50 division.

Are we considered common-law right away?

Typically, you must meet Alberta’s criteria for common-law relationships, which include:

Three years of cohabitation
Sharing a child
Signing an agreement

Is it always a 50/50 split?

Not necessarily. The court will look at contributions, agreements, and any other relevant information to determine a fair division of assets.

Disclaimer: The content provided in the blog posts of Jones Divorce & Family Law is general information and should not be considered legal advice. Please contact a lawyer for legal advice tailored to your specific situation. All articles are current as of their original publication date.