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Roommate sues for sale proceeds, claims marriage

These days it seems that everyone is, or has at least considered, renting out a property they own.

These days it seems that everyone is, or has at least considered, renting out a property they own. Whether you’re the owner of a condominium unit, renting out for a little extra cash while the place appreciates in value, or the landlord of a multiplex building, you’d be wise to ensure that you know the facts of law, as they pertain to your situation.

The general consensus in Toronto, and rightfully so, is that the rules and regulations of residential tenancy are heavily weighed in favor of the tenant. The deeper truth is that tenant doesn’t even have to be an official, documented tenant.

A few years back a friend of mine took possession of a brand new condo downtown and, to his credit, “gave” it to his son. In other words, his son, a student at the University of Toronto, had a most convenient and very impressive residence to call his own, while he studied away at one of Canada’s most intense and reputed universities. Of course, no rent was being charged by Owner Dad, who was planning on holding the unit until his son graduated, and then flipping it for a nice return.

The son sought out and secured a roommate. No rent was officially charged to said roommate — whether that was a specific arrangement or if the rent was paid in cash is irrelevant. Here’s the kicker. When the son graduated and Owner Dad decided to sell the unit the son’s roommate sued for half of the proceeds under the guise of “common-law marriage,” claiming that half of the assets of the “marital home” were rightfully theirs.

There existed no paper trail of rent that would indicate the relationship to be more business than personal. No written agreement. No proof of any kind.

Truth is, under the law, the parties of a matrimonial home — defined loosely as the primary place of residence for the married parties — share equal interest in that property, regardless of whose name appears on title! So while the son could argue that the roommate was paying rent and was only a friend, the best defence he had was his word against the roommate’s.

So, if you ever find yourself in the shoes of Owner Dad or his son, ensure that you have a written agreement that sets out, in detail, the specifics of your arrangement.

Remember, under the eyes of the law, it doesn’t matter what actually happened, it only matters what you can prove.

For more information, or other questions, feel free to email Amit at amitp@rogers.com.

Happy Hunting!

– Amit is a Realtor/Developer with Re/Max. amitp@rogers.com