COHABITATION AGREEMENT

Moving in with your partner or thinking about it? There may be some important things to know and consider. For many couples who are in a relationship of permanence or choose to live together in a common-law relationship without getting married, it is important you consider if you need a Cohabitation Agreement.

Whether or not your report your status to The Canada Revenue Agency as a common-law spouse, you may still be considered a spouse under the Family Law Act.

The Canada Revenue Agency considers parties to have been in a common law relationship if they have cohabitated for a period of at least 12 months. In Canada and specifically, in Ontario, common law relationships are defined differently.

The Family Law Act in Ontario considers parties as common law spouses if they:

• 1. Have lived together for a period of three or more years; and
• 2. Have been in a relationship of some permanence, if they are the parents of a child as set out in Section 4 of the Children’s Law Reform Act.

Regardless of your circumstance, it is important to protect yourself, especially when you choose to own property with your partner or if you are bringing significant or valuable assets into the relationship.

So, what is a Cohabitation Agreement? Well simply put, it is a signed document made between two non-married people, that either currently resides together or are planning on residing together.

A Cohabitation Agreement outlines each party’s rights and obligations in the event of a separation. Agreements can deal with several aspects including how property rights and obligations between the parties are defined (i.e. ownership and division of property) as well as rights and obligations related to spousal support.

It’s also important to note that if you enter into a Cohabitation Agreement and subsequently get married to your partner, the Agreement automatically becomes a valid Marriage Contract except, as otherwise provided as a term within the Agreement.

Most often people are surprised to learn that their assets and exposure to spousal support are not protected simply because they chose not to get married. Unfortunately, this could not be further from the truth and can lead to unintended consequences. This can include sharing in property or assets that were solely intended to be separate or dealing with the issue of spousal support.

As such, the only way to achieve some assurance is to enter into a properly negotiated and drafted Cohabitation Agreement.

We here at AP Lawyers, have a simple 6-step process to get you started in preparing your Agreement:

• 1. An initial Consultation
• 2. Communication of the terms
• 3. Financial disclosure
• 4. Negotiation of the terms
• 5. Drafting the Agreement
• 6. Execution of the Agreement

To learn more about your obligations arising out of cohabitation, please contact us. We have helped many clients get a Cohabitation Agreement in place. Some of which, own significant assets, while others want to protect the future assets they will gain. The common theme is that they all want to outline what happens should the relationship breakdown rather than taking the gamble or risk in extensive and costly legal disputes.