Moving in with your partner is an exciting step, but it’s also a significant legal and financial decision. In British Columbia, living together in a marriage-like relationship creates legal obligations and property rights that many couples don’t realize exist. A cohabitation agreement—essentially a prenup for unmarried couples—can protect both partners and prevent costly disputes if the relationship ends.
What is a Cohabitation Agreement?
A cohabitation agreement is a legal contract between two people who are living together or planning to live together in a marriage-like relationship. It’s sometimes called a “living together agreement” or “domestic contract.”
What It Does
- Defines how property and debts will be divided if you separate
- Clarifies financial expectations during the relationship
- Addresses spousal support obligations
- Protects assets you bring into the relationship
- Provides certainty and reduces conflict if you break up
What It Doesn’t Do
- It doesn’t govern child support (courts always determine this based on Federal Guidelines)
- It can’t override child custody or parenting arrangements (courts decide based on best interests of children)
- It can’t include illegal or unconscionable terms
- It doesn’t guarantee you’ll never have disputes
Why You Need One: BC’s Common-Law Property Rules
Many people believe that living together doesn’t create the same legal obligations as marriage. This is false in BC.
The Two-Year Rule
Under BC’s Family Law Act, you become “spouses” for property and support purposes if:
- You’ve lived together in a marriage-like relationship for at least 2 continuous years, OR
- You have a child together and have lived together in a marriage-like relationship of some permanence
Once you’re “spouses,” you have almost the same rights and obligations as married couples:
- Property acquired during the relationship is divided equally on separation
- You may owe or be entitled to spousal support
- Debts incurred during the relationship are shared
What This Means in Practice
Imagine this scenario: You and your partner move in together. Two years later, you break up. Under BC law:
- Your partner may be entitled to half of everything you earned or acquired during those two years
- Your increase in home equity, retirement savings, and other assets could be split 50/50
- Debts your partner incurred may become your responsibility
- You might owe spousal support
This applies even if you keep finances completely separate, even if assets are only in your name, and even if you never intended to create these legal obligations.
Who Needs a Cohabitation Agreement?
While everyone moving in together should consider one, cohabitation agreements are especially important for:
People Bringing Significant Assets Into the Relationship
- Own a home or other valuable property
- Have substantial savings or investments
- Own a business
- Expect an inheritance
- Have retirement accounts or pensions
People with Significant Income Disparity
- One partner earns substantially more than the other
- Potential spousal support obligations after separation
- Different earning potential or career prospects
People Who’ve Been Through Divorce Before
- Want to protect assets from a previous marriage
- Have children from prior relationships to protect
- Don’t want to risk another costly separation
Business Owners or Professionals
- Own a business or professional practice
- Have a partnership or shareholdings
- Intellectual property or professional goodwill to protect
Older Couples or Those Entering Second Relationships
- Established separate estates
- Want to protect inheritances for children
- Have retirement assets to preserve
People with Family Property or Businesses
- Farm or family business passed down through generations
- Family home with sentimental value
- Assets you want to keep in the family
What Should a Cohabitation Agreement Include?
1. Property Division
This is the core of most agreements. You can specify:
Excluded Property
- Assets owned before the relationship remain separate
- Inheritances and gifts stay with the recipient
- Specific property (like a family business) remains separate
- Increase in value of excluded property may also be excluded
How Shared Property Will Be Divided
- Equal split (default under BC law)
- Unequal split based on circumstances
- Specific items go to specific people
- One person buys out the other’s share
The Family Home
- If one person owns it before moving in, will it remain separate?
- Will the non-owner partner gain an interest over time?
- How will increases in equity be handled?
- What happens if one partner pays the mortgage or renovations?
2. Debts
- Debts brought into the relationship remain separate
- How joint debts will be allocated
- Responsibility for debts incurred individually during the relationship
- Credit card, loan, and mortgage obligations
3. Spousal Support
You can agree:
- Neither party will seek spousal support
- Support will be limited in amount or duration
- Support will only be payable in certain circumstances
Important: Courts can override support terms if they’re grossly unfair or unconscionable, especially if there’s significant economic disadvantage.
4. Contributions to Living Expenses
- How household expenses will be shared
- Who pays for what (rent, groceries, utilities, etc.)
- Proportional contributions based on income or equal split
- How shared accounts will be managed
5. Financial Management During the Relationship
- Joint accounts vs separate accounts
- Major purchase decisions
- Savings and investment strategies
- Budgeting and financial planning
6. Dispute Resolution
- Mediation required before going to court
- Arbitration clause
- Process for modifying the agreement
7. Duration and Modification
- When the agreement takes effect
- How long it lasts (usually indefinitely unless modified)
- Process for amending the agreement
- What happens if you marry (often converts to a marriage agreement)
8. Financial Disclosure
- Full disclosure of assets, debts, and income
- Updates required periodically
- Honesty is essential—failure to disclose can void the agreement
Common Provisions in Cohabitation Agreements
Keeping the Home Separate
“The family home located at [address], owned by Partner A before cohabitation, shall remain the separate property of Partner A. Partner B shall have no interest in the home’s value or equity, regardless of the duration of the relationship. If the relationship ends, Partner B agrees to vacate within 60 days.”
Proportional Expense Sharing
“Partners will contribute to household expenses in proportion to their incomes. Each partner will contribute their gross income percentage to a joint account for shared expenses including rent, utilities, groceries, and household supplies.”
No Spousal Support
“Upon separation, neither party shall seek spousal support from the other, regardless of the length of the relationship or economic circumstances, except where a court determines enforcement would be unconscionable.”
Business Protection
“Partner A’s business, [Business Name], and all interest in, income from, and increase in value of the business shall remain the separate property of Partner A. Partner B shall have no claim to the business or its value upon separation.”
What Makes a Cohabitation Agreement Valid?
Requirements Under BC Law
- In writing: Oral agreements aren’t enforceable
- Signed by both parties: Both must agree voluntarily
- Witnessed: Signature must be witnessed by someone who isn’t a party to the agreement
- Full financial disclosure: Both parties must disclose all assets, debts, and income
- Independent legal advice (highly recommended): While not strictly required, each party should have their own lawyer review the agreement
Avoiding Challenges to Your Agreement
Courts can set aside cohabitation agreements if:
- Inadequate disclosure: One party hid assets or debts
- Unconscionability: Terms are grossly unfair
- Fraud or duress: Agreement was signed under pressure or deception
- Lack of independent legal advice: Especially when one party is disadvantaged
- Significant change in circumstances: What was fair when signed is no longer fair
To protect your agreement:
- Ensure both parties have lawyers review it
- Provide complete financial disclosure
- Sign well before moving in together (not under time pressure)
- Keep terms fair and reasonable
- Review and update it periodically
The Process of Creating a Cohabitation Agreement
Step 1: Discuss Your Goals
- Have an honest conversation about finances, property, and expectations
- Discuss what you want to keep separate and what you’ll share
- Talk about spousal support expectations
- Be open about concerns and priorities
Step 2: Gather Financial Information
- List all assets (property, investments, savings, pensions)
- Document all debts
- Provide proof of income
- Be thorough and honest
Step 3: Consult with a Lawyer
- One of you hires a lawyer to draft the agreement
- Lawyer incorporates your wishes into legally sound language
- Ensures compliance with BC Family Law Act
Step 4: Both Review with Separate Lawyers
- Each person takes the draft to their own lawyer
- Lawyers advise on rights, obligations, and fairness
- Negotiate changes if needed
- This step protects both parties and strengthens the agreement
Step 5: Sign and Witness
- Both parties sign in the presence of witnesses
- Lawyers often provide certificates of independent legal advice
- Keep copies in a safe place
- Inform your estate executor about the agreement
How Much Does a Cohabitation Agreement Cost?
Legal fees vary based on complexity, but typical costs:
- Simple agreement: $1,500-$3,000 per person
- Moderate complexity: $3,000-$5,000 per person
- Complex (significant assets, business interests): $5,000-$10,000+ per person
While this seems expensive, compare it to:
- Legal fees for a contested separation: $15,000-$50,000+
- Loss of half your assets
- Years of spousal support payments
A cohabitation agreement is insurance—it costs money upfront but can save you far more later.
When to Get a Cohabitation Agreement
Ideal Timing
- Before moving in together (best option—no time pressure, less emotional)
- When planning to move in together
- When one person is moving into the other’s home
Still Worthwhile Even If You’re Already Living Together
- Before reaching the 2-year mark
- Even after 2 years (better late than never)
- When circumstances change (inheritance, business purchase, etc.)
When NOT to Create One
- When one person is pressuring the other
- When you’re already arguing about money
- When either party isn’t willing to be fully honest about finances
- If one person refuses to get independent legal advice
Cohabitation Agreements vs Marriage Agreements (Prenups)
Similarities
- Both govern property division and spousal support
- Both require writing, signatures, and witnesses
- Both benefit from independent legal advice
Differences
- Marriage agreement: For people who are married or planning to marry
- Cohabitation agreement: For people living together without marriage
- If you marry after signing a cohabitation agreement, many agreements automatically convert to marriage agreements
Common Misconceptions
“We’re Not Married So We Don’t Need One”
False. After 2 years of cohabitation in BC, you have the same property and support rights as married couples.
“It’s Not Romantic”
Actually, discussing finances openly before moving in together shows maturity and respect. It’s about protecting both people and ensuring clarity.
“My Partner Will Be Offended”
Frame it as protecting both of you. A fair agreement benefits both parties and prevents future conflict. If your partner refuses to discuss this, it’s a red flag.
“It Means We Don’t Trust Each Other”
No—it means you’re both realistic about the fact that relationships can end and want to handle that possibility responsibly.
“We Keep Everything Separate Anyway”
Doesn’t matter. BC law divides property based on when it was acquired, not whose name is on it. Separate accounts don’t protect you.
What Happens If You Don’t Have One?
Without a cohabitation agreement, BC’s Family Law Act default rules apply:
- Equal division of all property acquired during the relationship
- Equal responsibility for debts
- Potential spousal support obligations
- Lengthy and expensive court battles if you disagree
Even if you think you and your partner will be reasonable if you break up, grief, anger, and financial stress can change people. Agreements made when you’re happy together are far better than trying to negotiate during a breakup.
Updating Your Cohabitation Agreement
Review and consider updating your agreement when:
- You get married (often converts automatically)
- You have children together
- One of you receives an inheritance
- One of you starts a business
- There’s a significant change in income
- You purchase property together
- Every 5 years as a general rule
A cohabitation agreement isn’t a sign of distrust or pessimism—it’s a practical legal tool that protects both partners and provides clarity about financial expectations. In BC, where common-law spouses have the same property rights as married couples after two years, a cohabitation agreement is essential financial planning.
The conversation might feel uncomfortable, but it’s far less uncomfortable than a contested separation. By addressing these issues upfront, you’re building a foundation of honesty, communication, and mutual respect—all essential elements of a healthy relationship.
Get Your Cohabitation Agreement Done Right
V-Law’s experienced family lawyers can help you create a fair, legally sound cohabitation agreement that protects both you and your partner. We’ll ensure full disclosure, explain your rights, and draft an agreement that stands up to legal scrutiny.