Cohabitation Agreements in BC: Protecting Yourself Before Moving In

In British Columbia, couples who live together in a marriage-like relationship for two years are treated much like married spouses when they separate. Many people only learn this when the relationship ends, and by then the default rules have already applied.

A cohabitation agreement, signed before you move in or early in the relationship, lets you decide some of those rules yourselves. It is most useful for people bringing a home, savings, a business or children from an earlier relationship into a new household.

When the Family Law Act starts to apply

Under section 3 of the Family Law Act, you become a "spouse" if you live with someone in a marriage-like relationship for a continuous period of at least two years. Once that happens, the property and debt rules in Part 5 of the Act apply to you if you separate, just as they do to married couples.

There is an earlier trigger for support. For child and spousal support purposes, a person who has lived in a marriage-like relationship with someone and has a child with them is also a spouse, even if they have lived together for less than two years.

We cover the separation rules for unmarried couples in more detail in what separation means for your property when you are not married. This article is about planning before you get there.

Why homeowners should pay attention

Property you owned before the relationship began is generally excluded from division under section 85. That sounds reassuring, but there are two catches:

• Growth in value is shared. Section 84 treats the increase in value of excluded property during the relationship as family property. If you own a condo when you move in and it rises in value over the following years, that increase can be divided.
• You have to prove the exclusion. The person claiming that property is excluded has to show it. Records of what you owned, what it was worth and where the money came from matter years later.

Family property also includes things acquired during the relationship by either of you, such as savings, pensions, RRSPs and an interest in a business, and both spouses share responsibility for family debt. On separation, the starting point is an equal split.

What a cohabitation agreement can do

Section 92 lets spouses make agreements about dividing property and debt that depart from the Act. A cohabitation agreement is written to take effect if you later become spouses. It can, for example:

• keep your home, or its future increase in value, as your separate property;
• exclude a business, investments or particular savings that would otherwise be shared;
• divide family property unequally, or value it differently from the Act;
• say how debts will be shared; and
• deal with spousal support, including setting out when support changes or ends, or releasing it.

It can also cover practical matters while you live together, such as how household costs are shared and who owns the furniture and vehicles.

What it cannot settle in advance

An agreement about parenting arrangements or child support is binding only if it is made after separation, or when you are about to separate (sections 44 and 148). A cohabitation agreement signed before moving in cannot decide those issues. The court can also set aside a parenting agreement that is not in a child's best interests, and child support is assessed under the child support guidelines.

What helps an agreement hold up

Section 93 gives agreements that are in writing and signed by both of you, with each signature witnessed, a measure of protection. The court may set aside or replace such a property agreement only if, when you signed it:

• one of you failed to disclose significant property, debts or other relevant information;
• one of you took improper advantage of the other's vulnerability, ignorance, need or distress;
• one of you did not understand the nature or consequences of the agreement; or
• other circumstances existed that would make a contract voidable at common law.

Even if none of those apply, the court can still intervene if the agreement is significantly unfair, considering how much time has passed, whether you meant to achieve certainty, and how much you have relied on it. Spousal support terms face a broader review under section 164, which also looks at changes in your circumstances since signing.

In practice, that means full financial disclosure on both sides, enough time before the move to consider the terms, independent legal advice for each person, and witnessed signatures. An agreement signed the night before the moving truck arrives invites the very arguments section 93 allows.

A separate time limit also applies: an application to set aside a property or support agreement must generally be brought within two years after the spouse discovered, or reasonably ought to have discovered, the grounds (section 198).

How it differs from a marriage agreement

A marriage agreement does the same job for couples who are planning to marry, and the setting-aside rules are the same. If you sign a cohabitation agreement and later marry, check whether it still reflects what you both want, or whether a new agreement is needed. Our article on what a marriage agreement can and cannot do covers that side.

Line up your will and your title

A cohabitation agreement deals with separation. It does not decide what happens if one of you dies. Under section 2 of the Wills, Estates and Succession Act, two people who have lived in a marriage-like relationship for at least two years are spouses for estate purposes, which can give a partner rights in an estate. If you have children from an earlier relationship, your will should be reviewed once you move in.

The way you hold title to a home bought together, as joint tenants or tenants in common, also has consequences on death and on separation. It is worth deciding that alongside the agreement rather than at the closing table.

Moving in together? Put your agreement in place first

Our family lawyers can explain how the Family Law Act would apply to your situation, draft or review a cohabitation agreement, and arrange independent advice for each of you. We can also help you line up your will and the way your home is held on title.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.