Cohabitation Agreements and Property for Unmarried Couples in Ontario

Many couples live together for years without marrying, and then find that the property rules they expected do not apply. In Ontario, living together does not automatically create a right to share what the other person owns.

A cohabitation agreement lets you decide in advance how property will be handled if the relationship ends. This article explains the default rules, what an agreement can do, and its limits.

The default rules without an agreement

Common-law couples are not legally required to split property acquired while living together. Property belongs to whoever bought it, and there is no equalization or statutory matrimonial-home right for unmarried partners.

The broader definition of spouse (unmarried persons who cohabited continuously for at least three years, or who are in a relationship of some permanence and are the parents of a child) applies to support under Part III. It does not give common-law partners equalization under Part I.

A partner who contributed to property the other owns may have a right to part of it, and may need to go to court to recover the contribution unless the other partner agrees to repay it. How strong such a claim is depends on the facts and is worth discussing with a lawyer.

What a cohabitation agreement can do

Cohabitation agreements are one kind of domestic contract. Domestic contracts also include marriage contracts, separation agreements, paternity agreements and family arbitration agreements. A domestic contract dealing with a matter also dealt with in the Family Law Act prevails, unless the Act provides otherwise.

Because the default is that property belongs to whoever bought it, an agreement can be used to set different terms. Common topics include:

• who owns the home, savings and other assets now, and who will own what you acquire later
• how a contribution to the other's property will be recognized or repaid, given that otherwise a contributing partner may have to go to court
• how debts are handled
• what happens to the home if you separate

Separately, two people who cohabited and are living separate and apart may make a separation agreement on their rights and obligations, including ownership in or division of property.

What it cannot decide, and what happens if you marry

A cohabitation agreement cannot decide decision-making responsibility or parenting time. A court may disregard a provision on children's education, moral training, decision-making responsibility or parenting time where that is in the child's best interests, and may disregard an unreasonable child support provision, having regard to the child support guidelines.

If you later marry each other, a cohabitation agreement is deemed to be a marriage contract. From that point, married-couple rules also matter. For example, a provision in a marriage contract that tries to limit a spouse's rights under the matrimonial home part, such as possession and consent rights, is unenforceable. Review the agreement before you marry.

Making it hold up

A domestic contract, and any agreement to amend or rescind it, is unenforceable unless it is in writing, signed by the parties and witnessed. The Ontario government also advises that each partner use a different lawyer and that the partners exchange financial information before signing.

On application, a court may set aside a domestic contract or a provision in it in these situations:

• 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
• it can be set aside under the law of contract, for example for duress, undue influence, misrepresentation or unconscionability

What to do next

The best time to deal with these questions is before a dispute. If you are already separating without an agreement, the same general steps help you understand your position.

• List what each of you owns, owes and earns, and what each brought into the relationship.
• Collect records of who paid for the home, renovations and major purchases.
• Decide what you want the agreement to cover, and what must be left to the law, such as parenting time.
• Exchange full financial information and use separate lawyers.
• Sign the agreement in writing with a witness.
• Review it again if you marry, have children or buy a home.

Frequently asked questions