More Canadians than ever are choosing to live together without marrying. In Ontario, common-law couples — those who have lived together for 3 or more years, or who are in a relationship of some permanence and have a child together — have certain legal rights and obligations, but they are very different from the rights of married spouses. A cohabitation agreement, drafted and signed before or during the relationship, is the most powerful tool available to common-law partners to define their legal rights if the relationship ends.
What Is a Cohabitation Agreement?
A cohabitation agreement is a domestic contract under section 53 of Ontario's Family Law Act (FLA). It is a written agreement between two people who are cohabiting or intend to cohabit in a conjugal relationship. The FLA gives couples significant freedom to use these agreements to govern their property and support rights — both during the relationship and in the event of separation.
A cohabitation agreement can address:
- Ownership and division of property acquired before and during the relationship.
- Each partner's rights to spousal support in the event of separation.
- Disposition of property on death (though this does not substitute for a will).
- Any other matter regarding the settlement of their affairs.
Why Common-Law Couples Need This Agreement
Many people are surprised to learn that Ontario's property division rules for married couples do not automatically apply to common-law partners. Under the FLA's equalization provisions, married spouses are entitled to share in the increase in net family property during the marriage. These rules do not apply to common-law partners.
Without a cohabitation agreement (or constructive/resulting trust claims in court), common-law partners generally own what is in their name. If one partner purchases a home in their sole name and the other partner contributes to mortgage payments, renovations, and household expenses for years, the non-title partner may have limited legal recourse without going through expensive trust litigation. A cohabitation agreement can preemptively address these situations clearly.
Common-law partners in Ontario also have spousal support obligations after a relationship of 3 or more years, or earlier if there is a child. Without a cohabitation agreement, these obligations are determined by the courts using the factors in the Divorce Act (applicable to former spouses) or the FLA — which can result in significant ongoing support obligations.
Property Exclusions: What Can You Protect?
A cohabitation agreement can specify that assets owned by one partner before the relationship — or assets received by one partner as gifts or inheritances — remain that partner's sole property and are excluded from any property sharing arrangement in the event of separation. This is particularly important where:
- One partner owns real estate before the relationship begins.
- One partner has received or expects to receive a significant inheritance.
- One partner owns a business interest, professional practice, or investment portfolio.
- Partners have significantly disparate wealth, and the wealthier partner wants to avoid unintended sharing of pre-relationship assets.
The agreement should clearly list excluded properties (with legal descriptions where applicable) and specify the treatment of appreciation in those properties during the relationship. Courts have voided agreements that are too vague to be enforceable, so specificity matters.
Spousal Support Waivers
One of the most commercially significant features of a cohabitation agreement is the ability to waive spousal support rights — both parties can agree that neither will pay spousal support to the other in the event of separation, regardless of financial circumstances at the time of separation.
Ontario courts will generally enforce these waivers if the agreement was entered into freely and with full financial disclosure. However, courts can set aside a support waiver if enforcing it would be "unconscionable" — for example, if one partner ends up in such extreme financial hardship that enforcing the waiver would be manifestly unjust. This is a high bar, and well-drafted waivers are routinely enforced.
The Independent Legal Advice Requirement
While there is no absolute legal requirement in Ontario that each party receive independent legal advice (ILA) before signing a domestic contract, courts have repeatedly voided agreements where one or both parties did not have ILA. An agreement is far more likely to be set aside on the grounds of duress, undue influence, or failure to understand the agreement if one party was unrepresented.
Best practice for any cohabitation agreement is that:
- Each party retains their own independent lawyer (not the same lawyer for both parties).
- Each party's lawyer provides a written certificate of ILA confirming they explained the nature and consequences of the agreement to their client.
- The ILA certificate is attached to and signed as part of the final agreement.
The cost of ILA (typically $500–$1,500 per person for a straightforward agreement) is a small price to pay for the assurance that the agreement will be enforceable when you need it.
Full Financial Disclosure
A cohabitation agreement can be set aside if one party failed to disclose significant property or debts at the time of signing. Full financial disclosure — typically through attached financial statements listing all assets, liabilities, and income — is essential for both the legal validity of the agreement and the moral foundation of an equal partnership. Courts look unfavorably on agreements where one party concealed substantial assets.
Financial disclosure should be updated if circumstances change significantly between signing the agreement and any later date when the agreement might be relied upon. Consider including a provision in the agreement requiring updated disclosure statements at regular intervals or on the occurrence of specific events (e.g., sale of a major asset, receipt of an inheritance).
Conversion to a Marriage Contract
If a couple that has a cohabitation agreement later decides to marry, the cohabitation agreement automatically becomes a marriage contract under the FLA. The terms of the original agreement will continue to apply to the parties' married relationship unless they execute a new marriage contract. Couples planning to marry should have their cohabitation agreement reviewed by a family law lawyer to ensure it adequately addresses their changed legal status and any new property or support considerations arising from marriage.