In Canada, more and more couples are choosing to live together without officially marrying. This form of relationship — a common-law relationship — is not a traditional marriage, but over time, it brings significant legal consequences, especially regarding property division, financial support, and ownership rights. To avoid conflicts and clearly define mutual obligations, couples can enter into a cohabitation agreement.
What is a Cohabitation Agreement?
A cohabitation agreement is a written legal contract between partners who live together but are not married. This agreement sets out their arrangements regarding:
• Property rights
• Contributions to the household
• Division of assets in case of separation
• Spousal support or financial obligations
• Inheritance
• Responsibility for debts
This document acts as “insurance” for both parties — each knows their rights and responsibilities before any dispute arises.
Legal Force
All Canadian provinces recognize cohabitation agreements if they are:
• In writing
• Voluntarily signed by both parties
• Accompanied by independent legal advice for each partner
• Not contrary to law (especially regarding child custody or unconscionable reduction of obligations)
In case of separation, courts generally uphold the agreement if it was drafted according to these requirements. However, a court may intervene if the agreement is unfair or was signed under duress.
Property Rights in Common-Law Relationships
There is no unified federal law in Canada governing property division for common-law couples — rules are determined at the provincial level. For example:
• In Ontario, cohabitation does not provide automatic property division rights as marriage does.
• In British Columbia, common-law partners have nearly the same rights as married couples if they have lived together for at least two years.
This means a cohabitation agreement is especially important — it allows you to predetermine how assets will be divided in case of a breakup.
How Is Property Divided Without an Agreement?
Without a legal agreement, disputes are resolved based on:
• Unjust enrichment laws
• Or the principle of resulting trust
This can be a lengthy, emotionally draining, and expensive process. Proving joint contribution to assets, especially if property is registered to one partner only, can be difficult.
How to Draft a Cohabitation Agreement?
The process includes:
• Meeting with a lawyer — each party should receive independent legal advice. You can contact Fire Bird Law for assistance: https://www.firebirdlaw.ca
• Identifying assets, debts, and incomes — financial transparency
• Discussing terms — property rights, support, inheritance
• Signing and notarization
If the couple later marries, the agreement can be transformed into a marriage contract.
The Role of a Lawyer in Drafting the Agreement
A law firm assisting with a cohabitation agreement provides:
• Advice on rights and obligations of both partners
• Analysis of legal risks
• Drafting or reviewing the agreement
• Support during the signing process
• Updating the agreement in case of changes (e.g., birth of a child, purchase of property)
Inheritance and Assets
It is important to remember that a cohabitation agreement does not replace a will. To protect your partner in case of death, you should also:
• Draft a will naming your partner as a beneficiary
• Designate your partner as beneficiary for insurance policies or investment accounts
• Set up a trust if needed, to transfer assets with minimal taxes and creditor protection
Benefits of a Cohabitation Agreement
• Prevents conflicts in case of separation
• Protects personal property
• Sets out mechanisms for financial support
• Provides legal certainty
• Acts as proof of a bona fide relationship for banks, immigration, etc.
A cohabitation agreement is an important legal tool that allows common-law partners to agree in advance on their financial and property obligations. Given the legal differences among Canadian provinces, legal consultation is a key step in creating an effective and enforceable agreement.
If you plan to live together, are buying property jointly, or want to protect your assets, consult an experienced lawyer to draft an agreement. This decision will ensure peace of mind, transparency, and fairness in your relationship.
