Cohabitation agreement lawyer in North York

What is a cohabitation agreement?

Although live-in relationships seem to be simple, in practicality they grow to be more complicated with the passage of time, when they transition to a common-law relationship.

In Ontario, the Family Law Act provides for the definition of spouse to include:

• Persons who are married; and
• Unmarried persons who have either cohabited for more than 3 years or have a relationship of some permanence if they have a child(ren) together.

As per the Family Law Act, Common law partners are entitled to spousal support and child support, similar to married persons. It is because of these claims that one spouse can have against the other in the event of separation, people enter into cohabitation agreements prior to or during their common law relationship.

What to consider in a cohabitation agreement?

Cohabitation Agreements are ideally entered into for predetermining the spouses’ potential rights on each other’s assets and support obligation towards each other in the future. These agreements may also include:

• Opting to be financially independent of each other, the parties may also include clauses regarding the 
• Terms regarding the ownership of the matrimonial house and the possession thereof,
• Spousal support, 
• Child support,
• Division of property, 
• Equalization, 
• Household contents, 
• Estate rights,
• Debts and liabilities, along with other general terms. 

In your cohabitation agreement you may include mutual waiver of rights on each other’s assets as well as releasing and discharging each other and your respective heirs, executors, and administrators from all claims and rights that may arise out of cohabitation, marriage, or upon a breakdown of the relationship under the Family Law Act, the Succession Law Reform Act, or any other current or future legislation.

In your cohabitation agreement, you may include a clause to mutually agree on alienating any possibility of challenging for the issues contained therein, in the future.

What is a remedial constructive trust?

It is common for one spouse to hold the title in their name, while the other contributes into it monetarily or otherwise. In such a scenario, the spouse not holding the title has a constructive trust over the property of their spouse that they contributed to. 

What is unjust enrichment?

Unjust enrichment is a remedy to claim an interest in the property they have a constructive trust in. This means that, even if one spouse does not have the legal title to a property, but the title-holder had unjust enrichment at the expense of the other spouse, then the non-titleholder spouse can claim a share or interest in the property/asset in question.

The Supreme Court of Canada, in Moore v. Sweet, laid out the test for unjust enrichment, to include:

• That one party benefits at the expense of causing deprivation to the other; and
• There is no legal or juristic explanation for such enrichment.

Should I have a cohabitation agreement?

Just like prevention is better than sure, it is best to prepare for the worst, even if it is unlikely to happen. Rather than going through long and expensive legal procedures to divide the property, it is best to have it all planned beforehand. Not only will this be less expensive, but also ensure you are in control of the outcome of any separation. It is best to hire a lawyer to see through all the technicalities and possibilities, and then draft an agreement which best serves the issues specific to you and your partner.