Cohabitation Agreement Cost in Ontario: What Affects the Price?

Couples often ask what a cohabitation agreement costs. There is no single answer, because the work depends on your situation. This article does not quote prices. It explains what makes an agreement simpler or more involved so you can plan and ask better questions.

A cohabitation agreement is a contract between two unmarried people who live together or plan to. Understanding what goes into it helps you gather the right information and avoid delays.

What the agreement can cover

Two unmarried people who are cohabiting or intend to cohabit may make a cohabitation agreement. It can set their rights and obligations during cohabitation, on separation or on death, including ownership or division of property, support, the education and moral training of their children, and any other matter in settling their affairs.

The wording means an agreement can be signed after the couple has already moved in. The broader your list of topics, the more drafting and discussion are needed.

It helps to know what applies without an agreement. Ontario says common-law couples are not legally required to split property acquired while they lived together, and that furniture and household items belong to the person who bought them. However, a partner who contributed to property the other owns may have a right to part of it, and may have to go to court if the owner will not agree to repay. An agreement is one way to set out something different that suits your own circumstances.

Support is another reason couples make an agreement. For support claims, the Family Law Act treats two unmarried people as spouses if they have cohabited continuously for at least three years, or are in a relationship of some permanence and are the parents of a child. An agreement can address support, though a court may still set aside a support waiver in some cases.

Main factors that drive the work

• Assets and debts: a home, a business, investments, pensions or inherited property each raise questions about how they should be treated if you separate.
• Disclosure: Ontario's guidance says partners should exchange financial information before signing. Gathering statements and valuations takes time.
• Support terms: you may want to address spousal support, but a court may set aside a support provision or waiver in some circumstances, such as unconscionable circumstances.
• Children: the agreement can address child-related matters like education and moral training, but it cannot fix decision-making responsibility or parenting time. A court may also disregard an unreasonable child support term.
• Negotiation: if you and your partner disagree on terms, expect more back-and-forth than for a couple who agree on most points.
• Future marriage: if the parties to a cohabitation agreement marry each other, it is deemed to be a marriage contract.

Disclosure and independent advice

A court may set aside a domestic contract, or any provision in it, if a party failed to disclose significant assets, debts or other liabilities that existed when it was made, if a party did not understand its nature or consequences, or otherwise under the law of contract. This is why disclosure and independent advice matter.

Ontario's guidance advises that partners should speak to different lawyers and exchange financial information before signing. Each partner having their own advice means two sets of work rather than one, which is a reason total costs for a couple can be higher than they expect. It also helps the agreement stand up later.

The Act's formal requirements do not list independent legal advice. Even so, a court may set aside an agreement if a party did not understand its nature or consequences.

Keeping the process efficient

If the agreement later becomes a marriage contract, any provision that tries to limit a spouse's matrimonial home rights is unenforceable. That is worth raising early.

Changes cost time too. An agreement that amends or rescinds a domestic contract must also be in writing, signed by the parties and witnessed. If you separate, couples who cohabited may make a separation agreement setting their respective rights and obligations.

What to do next

• List your assets and debts, with approximate values and who holds title.
• Collect recent statements, tax returns and any existing agreements.
• Talk with your partner about the main issues: the home, savings, support and what happens on separation or death.
• Plan for each of you to speak to a different lawyer, as Ontario's guidance advises, and to exchange financial information before signing.
• Ask any lawyer how they will scope the work and what could change it, then compare answers in writing.
• Remember the signing rules: the agreement must be in writing, signed and witnessed.

Frequently asked questions