Cohabitation Agreement Ontario

We help clients protect their net worth and property with Cohabitation Agreements in Ontario.

What is a Cohabitation Agreement?

According to Ontario law, cohabitation agreement is an agreement between a couple who chooses to live together but not get married, otherwise known as a common law relationship. A cohabitation agreement usually contains details about what happens to common law partners’ property and sometimes support, if they break up.  

Couples who cohabitate may be considered to be in a “common law” relationship and are subject to many of the same family laws, rights and support obligations as a married couple when it comes to property and support. That’s why the cohabitation agreement covers many similar things to the marriage contract.

Most people don’t realize that common law spouses may not be able to walk away from a relationship with all their assets intact or without child support.  What’s “yours is yours and what’s mine is mine” might not actually be the case. That’s why you might want to obtain independent legal advice if you have questions. For example, you may be wondering: are cohabitation agreements legally binding? Common law claims can be very complicated to respond to and can result in a very expensive and stressful breakup.  Don’t let that be you!  Get a Cohabitation Agreement instead and save yourself the headache of a messy, costly breakup.  


Benefits of Cohabitation Agreement

A cohabitation agreement formalizes the rights and obligations of each partner in an unmarried couple and outlines what happens upon separation. An increasing number of unmarried couples choose to live together before marriage or if they decide not to marry. Although married couples have specific legal protections under Ontario’s Family Law Act in case of divorce, unmarried couples may have a claim to the other’s assets, depending on the circumstances of their relationship and in other cases they may have little legal recourse against one another if they choose to separate.  Assets that are particularly vulnerable to a claim include property – the home you are living in, cottages and even pensions.

Unmarried couples living together often jointly contribute to the accumulation of property during their relationship, including real estate, vehicles, and investments. Deciding which partner gets what assets during a breakup can quickly become contentious. With a cohabitation agreement, unmarried couples can firmly establish a fair division of property in the event of a breakup. Property rights, the right to financial support following a breakup, or the right to inherit from each other’s estates, can be included. Cohabitation agreements help avoid the need for litigation involving claims of unjust enrichment and the common law trust doctrine.

What is Usually Included in a Cohabitation Agreement?

An unmarried couple intending to live together or who has already moved in together may create a cohabitation agreement. This agreement can be drafted and signed even if you have been living together for many years.  It just needs to be signed prior to breaking up.  The terms of a cohabitation agreement can vary greatly depending on a couple’s specific circumstances, finances, and goals. However, topics generally covered by cohabitation agreements include:

  • Ownership of property brought into the relationship
  • Rights to property titled solely in the name of one partner, including property acquired during the relationship
  • Division of jointly acquired property in the event of separation
  • Financial contribution requirements during the relationship, including division of everyday expenses such as rent or mortgage, utilities, or car loans
  • Obligations to write wills providing an inheritance to the other partner
  • Financial support rights following separation

Although different from a prenuptial agreement/marriage contract, cohabitation agreements often cover many of the same details. Cohabitation agreements can automatically become a marriage contract if the couple later gets married. However, cohabitation agreements cannot cover certain topics, like parenting time (child custody), which a court must formalize separately if common law spouses share children.

Why Your Cohabitation Agreement Has to Be Personalized?

Your cohabitation agreement should reflect the parties’ specific circumstances and goals. If you and your partner choose to maintain financial independence from one another, your cohabitation agreement can state that neither partner can claim the property of the other, each partner will bear child expenses for the children they’ve brought into the relationship, the partners will maintain separate financial accounts, and neither can claim support after separation. Conversely, common law spouses who are more financially intertwined may craft a cohabitation agreement giving each partner rights to property brought into and acquired during the relationship, no matter whose name is on the title.

Why Do You Need a Lawyer for a Cohabitation Agreement?

Although you and your partner can write a cohabitation agreement yourselves, having separate legal counsel to advise you during the negotiation process is wise and will make the agreement stronger if it is ever challenged. Because a legally binding cohabitation agreement will affect your financial and property rights, you should speak with a lawyer who will explain the effects of signing the agreement and review any agreement terms you and your partner have drafted to ensure your goals and interests are met.