Cohabitation Agreements

Persons living or plan on living together in a common law relationship may choose to enter into a domestic agreement to set out their support and property rights and obligations. The law does not provide property rights to common law spouses on the breakdown of their relationship. Instead, any property accumulated during the course of the relationship is presumed to be owned by the spouse whose name is on the title or bill of sale. The presumption is defeated if the other spouse shows evidence that it should be ignored. However, in long term common law relationships, where most of the property has been accumulated in one person's name, the court will often ignore this presumption and declare that a share of the property is held in trust for the other partner.

A cohabitation agreement assists in avoiding confusion and disputes regarding property division. It can specify certain money or assets not available to be divided on separation. For example, if one spouse advances a large sum of money for a down payment on a home to be jointly owned, a cohabitation agreement can specify that, in the event of separation, the down payment can be returned to that spouse in full before the sale proceeds of the house are divided. This is merely one example of how a cohabitation agreement can protect the interests of both parties in a common law situation.