Moving in with a partner tends to be a happy logistical problem. Whose couch goes? Do you keep both leases until you are sure? Who pays the mortgage if one of you already owns a townhouse in Brampton and the other is about to start contributing? The harder questions, such as what happens to those contributions if the relationship ends, are the ones that rarely come up over boxes and takeout.
A cohabitation agreement is the document for those harder questions. It is a contract, recognized by section 53 of Ontario’s Family Law Act, in which two people who are living together or plan to live together set out their rights if they stop living together or if one of them dies. Done well, it can spare both of you a very expensive argument later. Done badly, it can give false comfort.
What follows is general information, not legal advice for your situation. Please have your own lawyer review any contract before you sign it.
Why the default rules surprise people
Ontario treats married and unmarried couples differently, and that difference is the main reason these agreements exist. If you are married and you separate, Part I of the Family Law Act generally equalizes the growth in the value of what each of you built up during the marriage. If you live together without marrying, that scheme does not apply, however long you were together. The family home also has no special status: if your name is not on title, you do not get the matrimonial home protections reserved for married spouses.
Support is different. Under section 29 of the Act, unmarried partners can owe each other spousal support if they have lived together continuously for at least three years, or if they are in a relationship of some permanence and are the parents of a child. So after three years, a partner who assumed there would be no financial tie may find there is one.
There is also a route to a property claim that catches people off guard. A partner who contributed to the other’s home or business without being compensated may claim unjust enrichment or a constructive trust. In Kerr v. Baranow, 2011 SCC 10, the Supreme Court of Canada described how a court may award a share of wealth built through a joint family venture. Those claims can be costly and uncertain for both people. A cohabitation agreement is one way to deal with them in advance.
What you can put in the agreement
Section 53 allows an agreement about rights and obligations during cohabitation, on ceasing to cohabit, or on death. It expressly includes ownership or division of property, support obligations, the right to direct the education and moral training of children, and any other matter in the settlement of your affairs.
Couples commonly address:
- The home. Whose it is, what a non-owner’s contributions to the mortgage or renovations will earn, and how the sale or buy-out works if you part ways.
- Pre-existing assets. A business, a rental property, RRSPs, or family money already in one person’s name.
- Future assets and shared purchases. A property bought together, vehicles, joint accounts, and whether title or contribution controls.
- Debts. Whether a student loan, a line of credit or a business guarantee stays with the person who took it on.
- Spousal support. Whether there will be any, for how long, or by what formula. A complete waiver is possible, though it has limits explained below.
- Household expenses. How costs get shared, and whether contributions are treated as rent, a gift, or something to be repaid.
- Death. What each person wishes to happen, including life insurance and an agreement to keep a will in place. Unmarried partners do not inherit automatically if there is no will, so this area deserves attention. The agreement alone may not be enough, and you may also need a will.
Hypothetically, imagine one partner buys out a parent’s share of a Brampton home using family money and the other starts paying half the carrying costs. Without a contract, the second partner may have a claim that is hard to value, and the first may have a title that does not reflect what happened. A short clause saying that contributions create a set interest, or none at all, clears away much of that uncertainty.
What it cannot do
Some limits are built into the statute. A cohabitation agreement cannot decide in advance who gets decision-making responsibility or parenting time for a child. Section 53 says so plainly, and section 56 lets the court disregard terms about children where that is in the child’s best interests. The same goes for child support: a court may disregard a provision that is unreasonable having regard to the child support guidelines. Child support is treated as the child’s right, and neither parent can sign it away.
A waiver of spousal support is also not bulletproof. Under section 33(4), a court may set aside a support provision or waiver in a domestic contract if it results in unconscionable circumstances, if the person qualifies for support out of public money, or if there is default in paying support under the contract. A waiver that looks fair today may be tested if one partner is later unable to work and left with little.
Nor can an agreement override third parties. A lender holding a mortgage is not bound by your private deal. Similarly, an immigration sponsorship undertaking is a commitment to the government. A clause between partners does not cancel it. If one of you is sponsoring the other, talk to a lawyer about both documents together.
What makes it enforceable
Section 55 sets the basic formalities: the agreement must be in writing, signed by both people, and witnessed. An unwitnessed contract, however sincerely signed, is at risk from the start. Ask a person who is not a party to watch both signatures and sign as witness, or better, sign at your lawyers’ offices.
Section 56(4) then lists the main reasons a court may set aside a domestic contract or part of one:
- a party failed to disclose significant assets, or significant debts or other liabilities, that existed when the contract was made
- a party did not understand the nature or consequences of the contract
- any other reason recognized by the law of contract, such as duress, misrepresentation or unconscionability
Three practical points follow from that list.
Disclose fully. Exchange a real financial picture, including income, property, debts, business interests, pensions and any foreign assets. A family property abroad does not stop being significant because it is overseas. Attach the disclosure as a schedule so that no one can later claim they never saw it.
Get separate lawyers. Independent legal advice is not a statutory requirement, yet it is one of the strongest pieces of evidence that each person understood what they were signing. One lawyer cannot act for both of you on this. Each person should have their own lawyer, who explains the rights they are giving up.
Leave plenty of time. Signing the night before a closing, the moving truck idling outside, invites a later argument about pressure. Start the conversation weeks before the move, and let drafts go back and forth.
If you need an interpreter to understand the document, use a neutral one and record that fact in the agreement. A partner who cannot read the contract has a ready-made argument later.
If you later marry
Under section 53(2), if the parties to a cohabitation agreement marry each other, the agreement is deemed to be a marriage contract. That is useful, because you do not automatically need to start over. It also means that rules for marriage contracts then apply, including the rule in section 52(2) that a provision purporting to limit a spouse’s possession rights in the matrimonial home is void. A contract written with an unmarried couple in mind may therefore not fit a marriage. Also, the equalization rules that were not relevant when you moved in become very relevant once you marry, so it is wise to confirm that the agreement clearly addresses them.
Keeping it current
A cohabitation agreement signed when you were both childless renters may look odd once you have two children, a house and a business. Agreements can be amended, and under section 55 an amendment needs the same formalities as the original: writing, signatures, witnesses. Good times to review include buying a home, having or adopting a child, starting or selling a business, one partner leaving work, a large inheritance, a move out of Ontario, or a decision to marry. Some couples include a built-in review date, or a clause under which certain terms expire after a set period or event.
Having the conversation
Raising a contract can feel unromantic, and many people worry it signals doubt. It may help to treat it as a planning conversation like buying insurance or making a will. You might start with the facts: “I own this condo with my brother, and I want us both to know how that works,” or “I am going to be putting my savings into this house, so I want to know that is protected.” Starting with what each of you wants to protect tends to go better than presenting a finished document.
Some couples work out the broad terms together and then take them to their lawyers. Others find it easier to meet separately first. Either can work, provided you both get proper advice before signing and neither of you feels pushed.
Where to begin
Before meeting a lawyer, each partner can make a rough list of what they own and owe, what they expect to contribute, and what they are worried about. Bring the deed or lease, mortgage statements, business records, and any existing will. Our family law team can review drafts or prepare an agreement, and our Brampton service area page explains how to reach us locally. If your questions concern support in particular, the child and spousal support page offers a starting point.
No contract can make a breakup painless. A clear one can mean that the financial side of things takes weeks to settle rather than years, and that two people who once chose to share a home can part on terms they agreed to at a time when they were on good terms.