By Nour Haj and David Baxter
Common-law relationships are becoming increasingly prevalent. Many young adult couples live in common law relationships as opposed to marriage, and older adults are increasingly choosing not to remarry when they re-partner after divorce.[1] In 2021, 22.7% of couples in Canada that lived together were living common law, and 15.7% of couples in Ontario were living common law.[2]
But what happens if an unmarried couple separates or if one party dies? In Ontario, unmarried partners do not have the same rights as married spouses. Specifically, there are limits on support depending on the duration of the relationship, and the property sharing scheme in Ontario only applies to married spouses; unmarried spouses do not automatically benefit from property sharing under the Ontario Family Law Act (FLA).[3] By way of example, if one partner moves into a home already owned by the other, the rights of the non-owning partner at separation are more limited than they would be for married spouses. Understanding these differences can help couples make informed choices about their future.
Although the term “common law” is generally used to describe unmarried couples who are cohabiting, it is not a defined legal term under the FLA. [4] Cohabitation is defined under the FLA as living together in a “conjugal” relationship, whether the parties are married or not.[5] Characteristics of a conjugal relationship include, but are not limited to, personal behaviour, services, societal perception of the couple, economic support, and having children together.[6]
Family law rights and obligations for unmarried couples, and the period of time the couple must live together before the rights arise, vary across Canadian jurisdictions and across different legislation.[7] In Ontario, where parties have been cohabiting for at least three years or have a child together, they are eligible to make certain claims under the FLA such as a claim to spousal support. Conversely, pursuant to s. 248(1) of the Income Tax Act,[8] unmarried partners are considered “common-law partners” for income tax purposes if they have lived together for 12 months or have a child together.
When cohabiting, it is important for parties to understand how their rights and obligations will be impacted on separation or death, and if those rights and obligations are not in line with the parties’ expectations, goals and intentions; the steps that can be taken to opt out of the legislation in Ontario. A cohabitation agreement can be used to ensure the parties’ rights and obligations are in line with their expectations, goals and intentions on cohabitation.
What Is a Cohabitation Agreement?
A cohabitation agreement is a domestic contract between unmarried parties who are cohabiting or intend to cohabit.[9] In this agreement, parties can set out their rights and obligations while they are cohabiting as well as their rights and obligations if there is a breakdown of the relationship (whether by separation or by death). A couple may enter into a cohabitation agreement before they begin living together or after they have been living together for any period of time. The agreement may also stipulate that, if the parties marry, the terms of the agreement will continue as a marriage contract.
For a cohabitation agreement to be enforceable in Ontario, it must be made in writing, signed by the parties, and witnessed.[10] The validity of a cohabitation agreement, either entirely or in part, is subject to certain conditions. A court may set aside a cohabitation agreement or part of it if a party failed to disclose significant assets to the other when the agreement was made, if a party did not understand the nature or consequences of the agreement, or if either of the parties did not receive independent legal advice on the agreement.[11]
What Can a Cohabitation Agreement Address?
Under the FLA, parties may enter into cohabitation agreements to address the education and moral training of children, support obligations, property, and“ any other matter in the settlement of the parties’ affairs.”[12]
To be clear, while the FLA provides that a contract may address “any other matter in the settlement of the parties’ affairs,” there are specific limitations on what a cohabitation agreement may not address, including most child-related issues.
Right to Direct Education and Moral Training of Children
Although it is not commonly done, cohabitation agreements may address issues related to children’s education and moral training (i.e. participation in particular faith traditions or having a certain cultural upbringing). However, the FLA does not allow parties to address issues related to parenting time or decision-making responsibility.[13] These issues can only be addressed at the time of separation in accordance with the laws at the time.[14] While parties sometimes include provisions relating to children in a cohabitation agreement, those provisions (or the agreement as a whole) may not be upheld if a court finds that it does not align with the best interests of the child.[15]
Support Obligations
Support obligations include both child support and spousal support.
Parties may not contract out of child support in a cohabitation agreement, but they may vary or waive the spousal support provisions under the FLA.
Under the FLA, spousal support may be sought by a “spouse” if the parties have lived together continuously for at least three years, or if they have a child together and have lived together in a relationship of some permanence.[16] Spousal support is intended to financially support the recipient by recognizing their contributions to the relationship and addressing economic consequences arising from the relationship.[17]
If a spouse establishes entitlement to spousal support, the recommended quantum and duration of spousal support is outlined by the Spousal Support Advisory Guidelines.[18]
Parties may vary the spousal support provisions under the FLA or waive spousal support entirely. For example, parties may choose to limit the support payable or the duration of support, or they may decide that each party is self-sufficient or intends to be self-sufficient for the duration of their relationship, and release the other from any claim to spousal support.
A court may set aside a spousal support provision in a cohabitation agreement if the provision itself or the circumstances under which it was negotiated are not fair, or if, at the time of separation, it no longer reflects the parties’ original intentions.[19] It is very important that the terms of the cohabitation agreement are properly drafted, that full financial disclosure is exchanged, and that each party receives independent legal advice on the terms of the agreement.
Property
Unlike married spouses, cohabitating partners are not subject to the property scheme under the FLA. This means that unmarried partners are not entitled to share in the growth of the value of either party’s net worth during the relationship and are not entitled to share in the value of or interest in property of the other, unless registered on title to such property. In addition, if a party dies without a will (intestate) and the parties are not married, the surviving spouse does not have the same property rights as if the parties were married. A party (married or unmarried) who has contributed to a property but is not registered to that property may make a constructive or resulting trust claim to an interest in the property; however, these claims are difficult and cumbersome.
Cohabitation agreements allow unmarried couples to set parameters for how property will be managed on the breakdown of the relationship (by way of separation or death), including defining financial expectations and clarifying ownership. For example, if it is the intention of the parties for a party not registered on title to share an interest in the property, a cohabitation agreement can enforce that intention. In the alternative, parties may wish to enter into a contract to protect the owner’s interest in the property and confirm that even though one party is moving into a residence solely owed by the other party, that residence will remain the sole property of the other party.
Other Matters that May be Addressed in a Cohabitation Agreement
Pursuant to s. 53(1)(d) of the FLA, parties may address other matters in the settlement of their affairs.[20] If there are additional issues they wish to address, such as household expenses, the division of household contents, how debts will be allocated, how to divide shared bank accounts, or who will retain the pets, these issues can be addressed in a cohabitation agreement. For more information on how Ontario courts handle pet ownership in separations, see associate Nikki Pangilinan’s blog “Practical, not Purr-fect: Why Ontario’s Pets-as-Property Approach Makes Sense.”
Conclusion
A cohabitation agreement can be used to ensure that rights and obligations on separation or death align with the parties’ expectations, goals and intentions.
Whether a couple is moving in together for the first time or has already been cohabiting for some time, it is important to understand the impact of the FLA on one’s specific circumstances, and the options for opting out of the legislative scheme by way of a cohabitation agreement if the terms of the FLA do not align with a party’s expectations, goals and intentions. In many circumstances, a well-drafted cohabitation agreement can provide clarity, certainty, and peace of mind.
This blog is intended to provide legal information only. This blog does not provide legal advice. If you need advice, contact us or another experienced family law lawyer.
[1] Statistics Canada, State of the union: Canada leads the G7 with nearly one-quarter of couples living common law, driven by Quebec (July 13, 2022), online: https://www150.statcan.gc.ca/n1/daily-quotidien/220713/dq220713b-eng.htm[Statistics Canada].
[2] Statistics Canada.
[3] Family Law Act, RSO 1990, c F.3.[FLA].
[5] FLA, RSO 1990, c F.3,s 1(1).
[6] M. v. H., [1999] 2 SCR 3 at para 59.
[7] Laurence Breton & Margo Hilbrecht, The Rights of Common-Law Partners in Canada (Ottawa: Vanier Institute for the Family, November 2023), online: https://vanierinstitute.ca/resource/the-rights-of-common-law-partners-in-canada/.
[8] Income Tax Act, RSC 1985, c 1 (5th Supp.), s.248(1).
[9] FLA, RSO 1990, c F.3,s 53(1).
[10] FLA, RSO 1990, c F.3,s 55(1).
[11] FLA, RSO 1990, c F.3,s 56(4).
[12] FLA, RSO 1990, c F.3,s 53(1).
[13] FLA, RSO 1990, c F.3, s 53(1)(c); see Knight v Gottesman, 2019 ONSC 4341 at para 78 where the court states that an agreement to determine the place of residence of the children following the breakdown of a relationship is invalid pursuant to section 53(1)(c) of the FLA.
[14] See FLA, RSO 1990, c F.3, s 54(d), which allows parties to address these issues in a separation agreement.
[15] FLA, RSO 1990, c F.3, s 56(1).
[16] FLA, RSO 1990, c F.3, s 29.
[17] Brebric v. Niksic, 2002 CanLII 41745 (ONCA) at para 23.
[18] Government of Canada, Department of Justice, “Spousal Support Advisory Guidelines: The Revised User's Guide”, prepared by Carol Rogerson and Rollie Thompson
(April2016), online: https://www.justice.gc.ca/eng/rp-pr/fl-lf/spousal-epoux/ug_a1-gu_a1/index.html.
[19] Miglin v Miglin, 2003 SCC 24. Note that Miglin also applies to other types of domestic contracts including cohabitation agreements; see Smith v. Smith, 2017ONCA 759.
[20] FLA, RSO1990, c F.3,s 53(1)(d).