Ontario Cohabitation Agreements: Common-Law Partners, Family Law Act Limits, and Property Division

Who Is a Common-Law Spouse in Ontario?

Ontario statutes use different definitions of "spouse" for different purposes, and the threshold for common-law spouse status varies by statute:

• Family Law Act s.29 (spousal support): partners who have cohabited continuously for at least three years, or have cohabited in a relationship of some permanence and are the natural or adoptive parents of a child.
• Succession Law Reform Act s.57: common-law partner defined as person who cohabited continuously for at least three years or in a relationship of some permanence as natural or adoptive parents of a child — for dependent support claims only, not inheritance rights.
• Income Tax Act: common-law partner defined as living together in conjugal relationship for 12 continuous months, or in a shorter period if the couple has a child.
• Ontario Human Rights Code: protection against discrimination on the basis of marital status includes common-law partners.

Critically, for the purposes of property division, there is no common-law spouse status under theFamily Law Act Part I. The equalization regime applies to married spouses only. A couple who lives together for twenty years without marrying has no statutory claim to equalization of property accumulated during the relationship.

Property Rights of Common-Law Partners at Breakdown

On the breakdown of a common-law relationship, each partner takes away the property they own in their own name, subject to:

Unjust Enrichment and Constructive Trust

The primary equitable remedy available to common-law partners is unjust enrichment. The Supreme Court of Canada in Kerr v Baranow 2011 SCC 10 restated the unjust enrichment analysis for domestic partners: the plaintiff must establish (1) an enrichment of the defendant, (2) a corresponding deprivation of the plaintiff, and (3) absence of a juristic reason for the enrichment.

Where unjust enrichment is established, the remedy may be either a personal monetary award (quantum meruit for services rendered) or a proprietary constructive trust where a monetary award would be inadequate — typically where the claimant has contributed to the acquisition, preservation, maintenance, or improvement of specific property.

Kerr v Baranow also introduced the concept of joint family venture (JFV) as a means of assessing mutual benefit conferral. Where parties pool their efforts and resources toward common goals during a long cohabitation, the court may find a JFV and award a share of the wealth accumulated through joint efforts proportional to the claimant's contribution. The JFV analysis looks at mutual effort, economic integration, actual intent, and the priority of the family in decision-making.

Resulting Trust

A resulting trust arises where one partner contributes financially to the acquisition of property registered in the other partner's name. The Pecore v Pecore 2007 SCC 17 presumption of resulting trust applies between common-law partners who are not in a parent-child relationship: gratuitous transfers between common-law partners of full capacity are presumed to be resulting trusts, not gifts.

A partner who contributed the down payment on a home titled in the other partner's name may assert a resulting trust proportional to their contribution. The presumption is rebuttable by evidence of a donative intent.

Partition and Sale

Where common-law partners jointly own property — either as joint tenants or tenants in common — either partner may apply to court for partition and sale under the Partition Act RSO 1990 c P.4. The court may order physical partition of the property (rare for residential property) or sale of the property and division of proceeds.

Spousal Support for Common-Law Partners

Unlike property division, spousal support rights do extend to certain common-law partners. UnderFamily Law Act s.29, a "spouse" for support purposes includes a person who has cohabited continuously with another person for at least three years or who is in a relationship of some permanence and is the natural or adoptive parent of a child of the other person.

Common-law partners who meet this threshold have the same entitlement to spousal support as married spouses — the analysis follows the same Moge v Moge [1992] 3 SCR 813 framework of compensatory and non-compensatory support and the Spousal Support Advisory Guidelines (SSAG).

A common-law relationship shorter than three years, without a child, gives rise to no statutory spousal support claim. Partners who anticipate a shorter relationship, or who want to define support obligations in advance, should include explicit spousal support provisions in a cohabitation agreement.

Cohabitation Agreements Under Family Law Act s.53

Section 53(1) of the Family Law Act authorizes two persons who are cohabiting or intend to cohabit and who are not married to each other to enter into a domestic contract — called a cohabitation agreement — in which they agree on their respective rights and obligations during cohabitation, on ceasing to cohabit, or on death.

Specifically, a cohabitation agreement may address:

• Ownership or division of property
• Support obligations
• The right to direct the education and moral training of children (cannot oust court jurisdiction)
• Any other matter in the settlement of their affairs

A cohabitation agreement that becomes effective during the parties' marriage is deemed a marriage contract under s.53(2). This conversion provision is important for couples who cohabit under a cohabitation agreement and later marry — the agreement continues to govern unless a new marriage contract is executed.

Formal Requirements for Validity

Section 55 sets out the formal requirements for a valid domestic contract, including a cohabitation agreement:

• Must be in writing
• Must be signed by both parties
• Must be witnessed

There is no requirement under the Family Law Act that both parties obtain independent legal advice (ILA) as a condition of validity. However, failure to obtain ILA is a significant factor in whether a court will set aside the agreement under s.56(4) on grounds of unconscionability or failure to understand the nature or consequences of the agreement.

Best practice is to ensure both parties have independent legal advice from separate counsel before signing, with written acknowledgment of receiving ILA. Some practitioners include a certificate of independent legal advice as a schedule to the agreement.

Setting Aside a Cohabitation Agreement: Section 56(4)

A court may set aside a domestic contract or a provision in it under s.56(4) if:

• A party failed to disclose to the other significant assets or significant debts or other liabilities existing when the domestic contract was made
• A party did not understand the nature or consequences of the domestic contract
• Otherwise in accordance with the law of contract

The "law of contract" ground incorporates duress, undue influence, misrepresentation, and unconscionability. Courts have set aside cohabitation agreements where one party exercised emotional or economic pressure over the other during negotiation, or where the agreement was signed shortly before the commencement of cohabitation without adequate time for review.

Section 56(4) does not authorize courts to set aside an agreement simply because it is unfair or gives one party a better deal. The threshold is meaningful non-disclosure, lack of understanding, or contractual defects — not mere imbalance.

What a Cohabitation Agreement Can and Cannot Do

Can Do

• Define ownership of property brought into the relationship and property accumulated during cohabitation
• Exclude certain property from any unjust enrichment or trust claim
• Create contractual obligations to share property that would not otherwise be shared under equity
• Define or waive spousal support obligations between the parties
• Establish a regime for jointly acquired property (including how a jointly owned home will be dealt with on breakdown)
• Convert into a marriage contract on marriage under s.53(2)
• Address designated beneficiary designations for RRSPs, TFSAs, and life insurance

Cannot Do

• Oust court jurisdiction over custody and access for children (s.56(1))
• Purport to adversely affect the right of a child to support under s.33 (s.56(1))
• Bind a court in determining the best interests of children in custody proceedings
• Contract out of the obligation of full financial disclosure on breakdown (courts will require financial disclosure regardless)

Drafting Considerations for Ontario Cohabitation Agreements

A well-drafted Ontario cohabitation agreement should clearly address:

• Ownership of pre-cohabitation property: Confirm that each party retains ownership of property brought into the relationship and that no unjust enrichment claim arises in respect of that property.
• Jointly acquired property during cohabitation: Address how property acquired during the relationship — including the family home, joint accounts, and investments — will be divided on breakdown.
• The family home: Unlike married spouses, common-law partners do not have automatic possession rights to a jointly owned or partner-owned home. The agreement should address possession rights, mortgage obligations, and how sale proceeds will be distributed on separation.
• Spousal support: Either define support entitlements (including a formula or quantum) or expressly waive support, with consideration of whether the waiver will be enforceable given the parties' circumstances.
• Death provisions: Address what happens to jointly owned property and financial accounts on the death of one party, and ensure alignment with wills and beneficiary designations.
• Dispute resolution: Consider including a mediation-first clause to reduce litigation costs on breakdown.

Financial disclosure at the time of execution is essential. Attach schedules listing each party's assets, liabilities, and income as of the execution date. Courts take non-disclosure seriously in s.56(4) applications, and detailed contemporaneous disclosure protects the agreement's enforceability.

Interaction with the Succession Law Reform Act

Unlike a married spouse, a common-law partner in Ontario has no automatic right to inherit from an intestate partner. Intestate succession under Part II of the Succession Law Reform ActRSO 1990 c S.26 passes the estate to the married spouse first, then to children — common-law partners receive nothing on intestacy regardless of the length of the relationship.

A common-law partner who was a dependant may make a support claim under Part V of the SLRA, but this is a support claim against the estate, not an inheritance right. Partners who want to benefit each other on death must execute wills.

Common-law partners frequently come to counsel for cohabitation agreement advice without having executed wills. Family lawyers advising cohabiting partners should raise the intersection of the cohabitation agreement with estate planning and recommend that both partners execute wills and update beneficiary designations to be consistent with the agreement.

Limitation Periods for Common-Law Claims

Claims for unjust enrichment and constructive trust arising from a common-law relationship are governed by the general two-year limitation period under the Limitations Act 2002s.4, subject to discoverability under s.5. The two-year clock runs from when the claimant knew or ought to have known that the claim arose.

Spousal support claims by common-law partners under the Family Law Act s.33 must be brought within two years of the date of separation: s.7(3)(b). Practitioners advising clients who separated from a common-law partner some time ago must assess whether the limitation period has expired before advising on the viability of an unjust enrichment or support claim.

Practical Implications for Ontario Family Law Practitioners

Common-law relationships account for a significant and growing proportion of Ontario families. Clients presenting for cohabitation agreement advice should be advised clearly about:

• The absence of equalization rights and the difference from married spousal rights
• The equitable remedies available on breakdown and their uncertainty compared to the statutory equalization formula
• The importance of registering jointly owned property, maintaining separate accounts for inherited or gifted funds, and documenting financial contributions
• The need for updated wills, powers of attorney, and beneficiary designations consistent with the cohabitation agreement
• The automatic conversion of the cohabitation agreement to a marriage contract on marriage

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