Ontario couples who decide to live together before marriage and purchase a house might consider completing what is called a a Cohabitation Agreement. In the United States these are called prenuptial agreements, but in Canada we refer to them as Cohabitation Agreements. It is an agreement that that spells out the rights of each person when it comes to the property. Ideally this should be done before making the purchase to avoid possible financial problems down the road. Since buying a home is generally the largest investment most individuals will ever make, they should take their time to review their rights before they make such a serious decision.
If unmarried couples don’t share the financial responsibility equally, they could be in for disputes farther down the road. A cohabitation agreement can prevent these disputes arising by outlining each person’s rights. Furthermore, these agreements can address topics such as how to manage disparities in payments, such as property taxes or a down payment. For a Cohabitation agreement to be binding it will need to be witnessed, should have a solicitor’s certificate proving the parties received independent legal advice before signing it, and all finances should be disclosed in it. If any of these are missing then the Court could render the agreement null and void.
While such an agreement might be seen by some as a difficult topic to discuss with their boyfriend or girlfriend, it’s usually easier to discuss this issue when things are going smoothly in the relationship rather than when a conflict is already brewing. While negotiating a Cohabitation Agreement might be emotionally draining, it can protect an unmarried couple. I can assist clients who wish to draw up one of these agreements and can ensure that it is thorough so that it will hold up in Court if need be.