Do I Need a Cohabitation Agreement as a Common-Law Couple in BC?

Many couples moving in together assume that without a marriage, nothing is shared. In British Columbia, that is not quite right. After enough time together, the law can treat you much like a married couple when it comes to property.

A cohabitation agreement lets you choose your own rules instead. This article explains what the law provides by default, what an agreement can cover, and when a court may refuse to uphold one.

This article covers the law of British Columbia.

What the law gives you without an agreement

A person is a spouse if married, or if they have lived with another person in a marriage-like relationship for a continuous period of at least two years. There is an exception: outside the property division and pension division parts of the Family Law Act, a person who has lived in a marriage-like relationship for less than two years is still a spouse if they have a child with the other person. So a child together can make someone a spouse for support and parenting matters, but not for property or pension division. Property division rules apply to unmarried couples who meet the two-year test. Before 2013, unmarried couples could not ask a court to divide property under the family property legislation, however long they had lived together.

Spouses are generally equally entitled to and responsible for family property and family debt. On separation each spouse has a right to an undivided half interest in all family property as a tenant in common.

Family property is property owned by at least one spouse, or in which at least one spouse has a beneficial interest, on the date of separation. It includes shares, business interests, tax refunds, bank account money, annuities and pension entitlements. Excluded property, such as property acquired before the relationship, inheritances and gifts from third parties, is not family property. However, the increase in value of excluded property since the later of the relationship start and acquisition is shared.

What a cohabitation agreement can cover

Couples can opt out of the property rules by agreement. Spouses may make agreements dividing property and debt equally or unequally. Agreements can also address how family property is valued, because property is valued at fair market value unless an agreement or order says otherwise.

• Which assets stay separate, such as a home or business you bring into the relationship.
• How debts will be shared if you separate.
• How a shared home would be handled.
• Whether either of you releases the other from spousal support. A spouse may agree in writing to do so.

A spouse who claims that property is excluded property must prove it. Keeping clear records, or recording the position in an agreement, can reduce later disputes.

When a court will set an agreement aside

A court can set aside a witnessed written property agreement only on listed grounds, such as a spouse failing to disclose significant property or debts, or not understanding the agreement. That is why honest, full disclosure before signing matters.

Spousal support releases work similarly. Where a witnessed written agreement exists, the court may not order spousal support unless the agreement is first set aside. It can be set aside for reasons such as non-disclosure of income, property or debts, or if it is significantly unfair.

Even without an agreement, or if an agreement is set aside, the Supreme Court may order an unequal division if equal division would be significantly unfair. Factors include the length of the relationship, the agreement terms and career contributions.

Who should think hardest about one

Whether an agreement is worth having depends on your circumstances. It is often worth considering if:

• One of you owns a home, business or significant savings before moving in.
• You expect an inheritance or gift.
• One of you has more debt than the other.
• One of you plans to reduce paid work to care for children.
• You want property to be handled differently than the default half-and-half approach.

If you have few assets and are comfortable with the default rules, you may decide an agreement is unnecessary. That is a legitimate choice, as long as you know what the default is.

What to do next

• Write down your start date for living together, since the relationship counts from the start of cohabitation.
• List what each of you owns and owes, with supporting documents.
• Share that information openly with your partner.
• Decide what you want to keep separate and what you want to share.
• Have each partner speak to a lawyer so the agreement is understood and properly signed and witnessed.

Frequently asked questions