Cohabitation Agreements

Cohabitation

In my previous post, I mentioned a recent decision by the Supreme Court of Canada that is likely to change the way that the courts deal with support and property conflicts between unmarried partners. There’s speculation among lawyers that the decision will lead to an increase in cohabitation agreements. So I thought it would be useful to say something about them here.

A “cohabitation agreement” is a contract between unmarried partners who live together, and it can be signed before the couple move in together or after. It usually specifies things like the rights and obligations of each party during the cohabitation, and what will happen if the relationship ends. For example, who will own property acquired during the relationship? Will one partner be obliged to support the other, and for how long? Who will move out of the shared residence, and how soon after the relationship ends should that person be expected to find a new home? For a cohabitation agreement to be legally binding the parties must sign it in front of a witness (who also signs); each must make a full and frank financial disclosure; and the parties must sign voluntarily.

There are good reasons for couples to work out a cohabitation agreement before moving in together. Working together on a cohabitation agreement can give each person some idea of how the other deals with conflict, and if they are able to have together what mediators like to call “difficult conversations.” For example, many couples avoid talking about money and realize only too late that they have different values around it and different spending habits. Having an open and honest discussion about each other’s financial situation and financial goals early in the relationship can help avoid conflict and misunderstanding later on. Another good reason to have a cohabitation agreement is that, if the relationship does break down, a legally binding agreement can provide some predictability about property rights, and it can help protect against unnecessary cost and litigation.

But do you really need a cohabitation agreement? A lawyer who specializes in family law can advise you about your particular situation. Likely, the answer depends on how much property you own, and how complicated your life is. If the only discussions you and your partner need to have are over who unloads the dishwasher and who pays the extra cable charges, probably a formal agreement isn’t necessary. But if one or the other owns a home or other substantial assets, or has children, a cohabitation agreement might be a good idea. Another factor to consider is whether the shared living arrangement is meant to be temporary or long-term. If the arrangement is meant to be long-term and indeed to take the place of a marriage, then having a formal agreement is probably advisable. I should also note that, ordinarily, a cohabitation agreement remains valid if the couple marries.

If you do decide that you and your partner would benefit from having a cohabitation agreement, then do it properly. Meet with a mediator if you find it difficult to discuss money or other sensitive subjects. Most importantly, each person signing the agreement needs independent legal advice. That means that both you and your partner should go over the agreement with your own lawyer. It is better to spend the money at the outset to make sure that you have a durable agreement, than to find out later (and at much greater expense) that your agreement won’t hold up in court.

Posted in Family.