If you and your partner are cohabiting, or planning on doing so, there are some legal issues that you should consider, including whether you should get a cohabitation agreement to protect both you and your partner’s interests should one of you pass away or should the relationship end. In this post we will discuss the issues that may arise when cohabiting, and how a cohabitation agreement can assist in preventing complications before they arise.
In this post, we use the term “cohabitation agreement” to reflect that the parties are not getting married. A cohabitation agreement is essentially a “prenup” for common law spouses.
We’re buying a home jointly, but I’m paying most of the down payment. What happens if we separate?
When common-law spouses separate, the general rule is that each spouse keeps the assets that are in their name, and jointly owned property is divided 50/50. This might not be what you want to happen; this is often the case when one spouse pays a larger share when purchasing property. Without a cohabitation agreement setting out how you are splitting the proceeds of the house, the person who paid more may end up losing out. In a cohabitation agreement, you and your partner can agree in advance on what happens to the down-payment, and ensure that your, or your parents’, interests are protected.
I contribute to the cost of the house, but I’m not on title. Should I be concerned?
If your spouse is the only one on title, and you are contributing to the cost of the home through general upkeep, renovations, or otherwise, you may want the property division on separation to reflect your contribution. A cohabitation agreement can set out in writing the recognition of your contribution to the home, and you can agree to share in the proceeds or value of the property upon separation. Without a cohabitation agreement, you might not be compensated at all.
I own a house, and my partner is moving in. What should I consider?
This is similar to the situation above, only reverse. In the event that you are the only one on title, and your partner is moving in, you may want to consider a cohabitation agreement to protect your interest. It is also a good tool for outlining each spouse’s expected contribution to the household expenses. Without a cohabitation agreement, your spouse might claim that they contributed to the value of the home and should be compensated in some way.