Reverse Mortgage and Common-Law Couples in Ontario: Legal Guide

Millions of Canadians live in common-law relationships, and many are under the impression that common-law status in Ontario comes with the same legal protections as marriage. For most purposes, this impression is broadly correct — but when it comes to property ownership, mortgages, and estate rights, the differences between common-law and married couples are significant enough to cause serious financial harm if they are overlooked. If you and your partner are in a common-law relationship and you are considering a reverse mortgage, understanding these distinctions before you apply could protect your home, your relationship, and your retirement.

This article is for educational purposes only and does not constitute financial advice.

What "Common-Law" Means in Ontario

In Ontario, the legal definition of a common-law relationship (also called a conjugal relationship or cohabiting partnership) varies depending on the legislation being applied. For most Ontario family law purposes under the Family Law Act, a couple is considered common-law after either:

• Three years of continuous cohabitation in a conjugal relationship, or
• Cohabiting in a conjugal relationship and having a child together (without a minimum time requirement)

For federal purposes (tax, CPP, OAS), the threshold is one year of continuous cohabitation. This means you may be considered common-law federally for tax purposes before you have any rights under the Ontario Family Law Act.

The critical distinction from a reverse mortgage perspective is not your relationship status per se — it is who is on title to the property.

Title Ownership: The Core Issue for Common-Law Couples

A reverse mortgage can be taken out by one borrower or multiple co-borrowers, but all registered owners on title must be included in the application. This is not optional — lenders require that every person registered on title consents to and is listed on the reverse mortgage.

This creates two very different scenarios for common-law couples:

Scenario A: Both Partners Are on Title

If both partners are registered owners of the property, and both are at least 55 years old, both can be listed as co-borrowers on the reverse mortgage. In this scenario, the loan does not become due because one partner passes away or moves to a care facility — it only becomes due when the last surviving borrower permanently vacates or passes. This provides strong, symmetrical protection for both partners.

Scenario B: Only One Partner Is on Title

This is where common-law couples face significant risk. If only one partner is registered on title, only that partner is legally the homeowner. The non-title partner has no automatic ownership rights in Ontario — unlike a married spouse, a common-law partner does not have a right to possession of the matrimonial home under the Family Law Act. If the title-holding partner:

• Passes away — the reverse mortgage becomes due and payable. The surviving partner (not on title) has no automatic right to remain in the home and may face an estate process that forces a sale.
• Moves permanently to a care facility — the reverse mortgage becomes due. Again, the non-title partner has no protected right to occupy the home.
• Unilaterally decides to sell — a common-law partner has no veto right over the sale of a property they do not own.

This is a fundamentally different position from that of a married spouse. Under Ontario's Family Law Act, a married spouse has a right to possession of the matrimonial home regardless of title. A common-law partner has no equivalent statutory protection.

Why Both Partners Should Be on Title Before Applying

The single most important protective step a common-law couple can take before applying for a reverse mortgage is ensuring both partners are registered on title. This is not a complicated process — it involves a property transfer (adding the non-title partner), which requires a lawyer and will involve land transfer tax in most cases (though spousal exemptions may apply, common-law couples may not qualify for the same spousal exemption as married couples, so legal advice is essential).

Once both partners are on title and both are at least 55, they can both be listed as co-borrowers on the reverse mortgage. This ensures:

• Neither partner can be forced to vacate if the other passes first
• The reverse mortgage does not become due until the last borrower permanently leaves
• Both partners have equal legal standing with respect to the property and the loan

Rick Sekhon consistently recommends that common-law couples review their title arrangements before initiating a reverse mortgage application. A conversation with a lawyer at this early stage can prevent serious problems later.

Comparing Married and Common-Law Couples in Ontario

Legal Area	Married Couple	Common-Law Couple
Right to possess matrimonial home	Yes — both spouses, regardless of title (Family Law Act)	No — only registered title owner(s)
Veto on sale of shared home	Yes — both spouses must consent	Only if both on title
Equalization of net family property	Yes — upon separation	No automatic equalization
Intestate inheritance (no will)	Yes — automatic inheritance rights	No automatic rights in Ontario
Reverse mortgage: must be listed as co-borrower	If on title, yes	If on title, yes
Reverse mortgage: protected if partner passes	Yes (if co-borrowers)	Only if on title and listed as co-borrower
Independent Legal Advice required	Yes, before closing	Yes, before closing
Recommendation	Both on RM application	Ensure both on title before applying

The Role of Independent Legal Advice (ILA)

Independent Legal Advice (ILA) is not optional — it is a mandatory requirement before closing any reverse mortgage in Ontario. Each borrower (including each co-borrower) must obtain ILA from a lawyer who is acting solely for them, not for the lender or the other borrower.

For common-law couples, ILA is particularly important because the lawyer providing ILA can:

• Review the title arrangement and flag any risks from the single-title scenario
• Explain what rights the non-title partner has (and does not have) in the event of their partner's death
• Review the reverse mortgage terms and ensure both partners understand their obligations
• Advise on whether adding the non-title partner to title before closing is appropriate
• Review the estate implications of the reverse mortgage on both partners

Each partner should ideally obtain ILA from their own separate lawyer, particularly where there is any asymmetry in title ownership or financial interest.

Property Rights, Wills, and Estate Planning

Common-law partners in Ontario do not automatically inherit from each other under the rules of intestacy (dying without a will). If the title-holding partner dies without a valid will that explicitly leaves the property to the common-law partner, the property will pass to other heirs — potentially the deceased's children, siblings, or other relatives — and the surviving common-law partner may have no legal right to stay in the home.

This has direct implications for a reverse mortgage. If the title-holding partner dies and the property passes to estate beneficiaries who decide to sell, the reverse mortgage will be triggered, and the surviving common-law partner who is not on title may have very little recourse.

Every common-law couple should have current, valid wills that clearly address what happens to the property upon death. Combined with both partners being on title and both being listed as reverse mortgage co-borrowers, a proper will creates a comprehensive layer of protection.

Practical Steps for Common-Law Couples Considering a Reverse Mortgage

1. Check your title. Review the current title of your home to confirm who is registered as owner. If only one partner is on title, speak to a real estate lawyer about adding the other partner before applying for a reverse mortgage.

2. Confirm both partners are at least 55. All registered owners must meet the minimum age requirement. If one partner is under 55, the reverse mortgage application cannot proceed until they reach 55.

3. Speak to Rick Sekhon. Rick Sekhon can review your situation and advise on which lenders and products are appropriate, and what the implications are of your current title arrangement.

4. Obtain Independent Legal Advice. Before closing, each partner must independently consult with their own lawyer. This is mandatory — not optional.

5. Review your wills. Ensure your wills clearly address ownership of the property and what happens to both the home and the reverse mortgage upon death. A common-law partner should be specifically named.

6. Consider a cohabitation agreement. If you do not already have one, a cohabitation agreement can formalise financial arrangements between common-law partners and provide additional protection in the event of separation or death.

Frequently Asked Questions

We have lived together for ten years. Doesn't that mean we have the same rights as a married couple?

In Ontario, common-law partners have some similar rights to married couples for certain purposes (support, for example), but not for property. The right to possess the matrimonial home regardless of title is a right available only to married spouses under the Ontario Family Law Act. This is one of the most significant legal distinctions between common-law and married status in Ontario.

My partner is 52 and I am 68. Can I apply for a reverse mortgage on my own?

Yes, if you are the sole registered owner of the property and you are at least 55, you can apply in your name alone. However, this creates significant risk for your partner: if you pass away or permanently move, the reverse mortgage becomes due and your partner (who is not a borrower and not on title) may need to vacate. Waiting until your partner turns 55 and adding them to both title and the reverse mortgage application provides far better protection. Rick Sekhon can help you weigh the trade-offs.

What happens to the reverse mortgage when the last borrower passes?

The reverse mortgage becomes due and payable. The estate (or heirs) typically have a reasonable period — generally around six months to a year, depending on the lender — to repay the loan, usually by selling the property. Any equity remaining after the reverse mortgage is repaid belongs to the estate and ultimately to the heirs named in the will.

Does a common-law partner have any legal recourse if they are forced out of the home?

A common-law partner who is not on title has limited rights under Ontario property law. They may have a claim under the concept of unjust enrichment or constructive trust if they can demonstrate a financial contribution to the property over the years — but this requires litigation and is costly and uncertain. The far better approach is to ensure title is shared from the outset.

Is the reverse mortgage itself community property between common-law partners?

No. The reverse mortgage is a debt secured against the property. If only one partner is on title and is the sole borrower, only that partner is legally responsible for the debt. The non-title partner is not a borrower and has no obligation to repay — but they also have no legal protection from the consequences if the borrower passes or vacates.

Conclusion

Common-law couples in Ontario have access to reverse mortgages on the same basic terms as married couples — but the legal framework surrounding property ownership, estate rights, and occupancy is meaningfully different. The practical answer is straightforward: ensure both partners are on title and both are listed as co-borrowers before closing. Pair this with current wills, a cohabitation agreement if appropriate, and mandatory Independent Legal Advice for both partners, and your reverse mortgage can provide the same stability and protection that married couples enjoy.

Speak to a licensed mortgage professional. Independent legal advice is required before closing a reverse mortgage in Ontario.

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This content is for illustrative purposes only. Rates may vary. Call Rick Sekhon for the best rates and more information.