Moving in Together? Why A Cohabitation Agreement Should be Considered in Durham
Moving in together is an essential part of any couple’s life. Beyond choosing a residence and blending their daily lives, a couple may also start dividing expenses, buying a property, sharing household duties, and making future financial decisions.
A cohabitation agreement helps couples in Durham, Ontario, by legally outlining how they will handle certain issues during the relationship, in case of separation, or in other situations covered by the agreement.
Under Ontario’s Family Law Act, two individuals who live together or plan to live together and are not married may sign a cohabitation agreement.
What is A Cohabitation Agreement?
A cohabitation agreement is a contract for unmarried couples in Ontario under the Family Law Act. Section 53 of the Family Law Act states, with an amendment by section 106, that two individuals who are cohabiting and intend to continue to cohabit and are unmarried may enter into an agreement regarding their respective rights and liabilities on cohabiting, on ceasing to cohabit, or on death.
Depending upon specific situations, a cohabitation agreement can address issues such as:
- ownership of property
- division of property
- support obligations
Specific agreements regarding children’s education and moral training; any other issues that may have to be settled
Thus, a contract or cohabitation agreement in Ontario can explain what to do in the event of a relationship breakdown; the terms can also include financial/property provisions for when the couple lives together.
When Should A Couple Consider Such A Contract?
There is no specified period a couple must live together (6 months/1 year/etc.) before considering the contract. Specifically, section 53 gives people who intend to cohabit the right to enter into a contract.
For this reason, one can begin the process before living together as a couple. It allows both partners to consider the terms before starting and to get advice about the agreement itself.
For cohabitation agreements and marriage contracts, the Ontario government advises both parties to retain separate lawyers and share information about themselves, including their financial background, before signing.
1. Cover those points the parties want to document
The couple can list the financial matters and property they want to cover under the agreement (e.g., Property they own now and in the future; property/debts they jointly own; and other matters affecting payments for home-related bills/support payments).
The whole process will therefore depend on their individual financial situation and what they want to include in this binding agreement.
2. Provide related financial information to each other
Disclosing financial information is necessary to enter into a binding contract on this matter. This may include how much each person has, owes to others, earns, etc.
The Government’s Guide on cohabitation agreements strongly states: You should give the other person this financial information before you sign an agreement together.
3. Obtain legal advice
Each person can use their own lawyer to discuss the agreement. If two different lawyers represent each party when discussing and creating the agreement, each person can discuss the document individually. The Ontario government even recommends that couples meet with two separate lawyers before signing a cohabitation agreement.
4. Draft and review agreement
The document can be prepared to include the terms set out by both parties after discussion. Each person must have enough time to review the document and ask questions before signing.
5. Signing and witnessing the agreement
Ontario residents must follow strict legal formalities for domestic contracts. Under section 55 of the Family Law Act, any domestic contract, including a cohabitation agreement, must be on paper, signed by both parties, and witnessed. Even the Ontario government suggests that two parties must sign the agreement while a third party is present as the witness.
Must Read : Understanding Family Law in Durham
What Provisions Should be Included in A Cohabitation Agreement?
Durham has no standard set of provisions or requirements for cohabitation agreements. It suits all couples, as the inclusions depend on the couple’s specific circumstances and what they want to cover. The Family Law Act sets out several topics that can be included: Ownership of Property-provisions with respect to ownership of property; Division of Property-provisions regarding the division of property; Support Duties-provisions with respect to financial support between parties; Children-provisions concerning the right of each party to the control of the education and moral upbringing of a child, in accordance with the limitations provided by the Act.
Other Matters-the Act does allow a couple to agree with respect to “other matters relating to the settling of a couple’s affairs”.
However, some provisions cannot be included in a cohabitation agreement: under section 21 [below], the parties cannot determine decision-making responsibility or parenting time for the children. As the provisions included will always depend on the couple’s specific circumstances, they must be assessed in relation to the parties’ financial position, property interests and objectives.
When Does the Cohabitation Agreement Start, and On What Date?
The operative date for an agreement is a major drafting consideration.
There is no doubt that couples can enter into a cohabitation agreement where the parties already live together, or where they propose to live together. Section 53 explicitly provides for a cohabitation agreement to be made between persons who propose to live together.
The agreement should accordingly explicitly identify the parties and state any conditions as to when particular parts are intended to become operative.
A lawyer either in preparing or reviewing the agreement can work out those terms based on the parties’ circumstances.
When Will A Cohabitation Agreement Cease to be Operative?
There is no fixed statutory time limit on the operation of a cohabitation agreement, simply because a certain number of years has passed.
The agreement’s operation, and therefore its lifespan, depends on its terms and on operation of law. The parties can also vary domestic contracts. An agreement to amend or repeal a domestic contract requires those requirements to be satisfied: Section 55 provides that an agreement to amend or rescind a domestic contract must comply with these requirements.
The parties therefore need to ensure they review their existing cohabitation agreement when their situations have changed substantially, whether in property, financial, or family matters.
Another matter for consideration would be the subject matter of marriage. Section 53(2) states that if parties have a cohabitation agreement and later marry, the agreement becomes a marriage contract.
Does the Ontario Government Offer A Template for A Cohabitation Agreement?
The Ontario government does outline the basics of cohabitation agreements through its resources available online, in particular its guide on dividing property between persons after a marriage or common-law relationship is dissolved.
For the actual legislation, please see here:
Ontario Family Law Act – official government portal:
For the government family law guide, see:
Ontario government- Dividing property when a marriage or common-law relationship ends:
https://www.ontario.ca/page/dividing-property-when-marriage-or-common-law-relationship-ends
Here’s a good overview of what the template should look like. However, since a cohabitation agreement is essentially a legally binding contract whose terms should generally be customized to the specific case and individual, it is best for the parties to have a lawyer draft it, or at least review it.
Conclusion
Cohabiting is about people living together and intertwining their lives. In the Durham Region, a cohabitation agreement could address several things, including property, finances, child support, and other matters the parties agree on. If the couple parts ways, the process would involve a settlement. The agreed terms would be examined, and finances declared and assessed. The parties seek legal advice, then draft and execute a contract.
Because it depends on the content, type, and conditions, it will likely differ. Anyone who wants to use a cohabitation agreement in their circumstances should seek legal advice before signing it.
If you have questions about forming, reviewing, or amending a Durham-based cohabitation agreement, feel free to contact Alibhai Law for more information.
FAQs
1. Should the cohabitation agreement be drafted before a common-law relationship?
The Family Law Act lets couples draft a cohabitation agreement before they enter a common-law relationship. However, they are not required to do so before they cohabit.
2. Does the cohabitation agreement need to be notarized?
Under the Family Law Act, a domestic contract must be on paper, signed by the parties, and witnessed. There is no specific requirement for notarization set out in the legislation.
3. Can a cohabitation agreement be varied or annulled?
Yes, the Family Law Act outlines an agreement to vary or annul domestic contracts. It must meet the formal requirements and not be notarized.
4. What happens to a cohabitation agreement after the parties marry one another?
If a marriage subsequently occurs between persons who have a cohabitation agreement, the cohabitation agreement is taken to be a marriage contract on their marriage pursuant to Section 53(2) of the Family Law Act.
5. Can a cohabitation agreement cover parenting?
Although the Family Law Act allows specific wording relating to the upbringing and moral training of a child, a cohabitation agreement is not the appropriate instrument to decide child support or the allocation of decision-making or parenting time.
