A Cohabitation Agreement is a domestic contract worth considering before moving in together.
If you’re thinking about moving in with your significant other, you should consider entering into a Cohabitation Agreement first. A Cohabitation Agreement is a type of domestic contract that can deal with a variety of issues arising in the course of living together, and in the unfortunate event of a breakup.

Why have a Cohabitation Agreement?

One of the benefits to entering into a Cohabitation Agreement is it ensures you are on the same page as your partner about what the expectations are while living together, and in the event of a breakup. By living together, your partner’s finances can become intertwined with yours. In the event of a breakup, this can lead to emotionally charged arguments about who owes money to whom.

While conversations surrounding financial topics like ‘who pays for utilities and rent?’ or ‘who gets to keep the condo in the event of a breakup?’ are difficult, discussing these matters upfront can protect you down the line. At its root, a Cohabitation Agreement is a financial planning tool.

What this type of agreement can do for you?

As stated in Section 53 of the Family Law Act, a Cohabitation Agreement between two partners can deal with:

  1. ownership in or division of property
  2. support obligations
  3. the right to direct the education and moral training of their children, but not the right to decision-making responsibility or parenting time with respect to their children, and
  4. any other matter in the settlement of their affairs.

Essentially, the terms of each Cohabitation Agreement can be drafted to your specific needs or concerns. If you expect to receive a large family inheritance in the future, for example, you may want to specifically indicate in your Cohabitation Agreement that your significant other has no legal claim to any inheritances you may receive in the event of a breakup.

Cohabitation Agreements can also potentially increase a person’s entitlement. For example, in Ontario, only married spouses are entitled to equalization of net family property. Common-law spouses do not have the same distinct entitlements. A Cohabitation Agreement can be used to increase the entitlements of a common-law partner by outlining how property will be dealt with in the event of a relationship breakdown.

Ultimately, a Cohabitation Agreement affords both parties in a relationship peace of mind. As well, if everything goes well and you marry your significant other, the Cohabitation Agreement automatically becomes a Marriage Contract, and you can continue to have peace of mind knowing that your interests are protected.