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Do I Need a Cohabitation Agreement?

On January 1, 2020, the Family Property Act replaced the Matrimonial Property Act. The biggest changes relate to property rights for "common law couples". Unlike the Matrimonial Property Act it applies to "common law" couples and gives them the exact same property rights as the Matrimonial Property Act gave to married couples. I use quotes because the meaning of "common law" couple has never been clear in Alberta and the Family Property Act does not use that phrase. Instead, it uses the phrase "adult interdependent partners" and, unfortunately, that phrase is no more clear than "common law". If you work in the financial services or real estate industries, this makes it hard to know when your clients need a cohabitation agreement that deals with the end of their cohabitation.

There will be clear cases (ie, where unmarried people live together and have children together.) On the other hand, there are many cases that are less clear. For example, there is nothing preventing it from applying to roommates or family members in certain circumstances.

The most important thing to take away: the relationship does not need to be like a marriage!

The law leaves a lot of important decisions in the hands of our judges so until the judges start publishing decisions about how the law applies, the only advice I can give is to be overly cautious. The judges will apply certain factors to decide whether people are "adult interdependent partners".

In my opinion, the factors that are most likely to lead to unexpected surprises are: 1. Sex is a factor a judge will consider but not a requirement, and 2. exclusivity is a factor a judge will consider but not a requirement. It is possible that people who have never slept together and/or openly date other people will have their property divided as though they were married.

Importantly, a judge will consider the factors after the relationship is over. This means intentions at the time you move in together are not relevant unless you put those intentions in a cohabitation agreement.

If you own significant property and are considering moving in with someone or already are living with someone you are not married to, I recommend you contact a family law lawyer about a cohabitation agreement.

If you have additional questions about how to get your cohabitation agreement started or you are ready to have one made please contact Tyler Fric.

The complete test and factors follow below.

(f) "relationship of interdependence" means a relationship outside marriage in which any 2 persons

(i) share one another's lives,

(ii) are emotionally committed to one another, and

(iii) function as an economic and domestic unit.

(2) In determining whether 2 persons function as an economic and domestic unit for the purposes of subsection (1)(f)(iii), all the circumstances of the relationship must be taken into account, including such of the following matters as may be relevant:

(a) whether or not the persons have a conjugal relationship;

(b) the degree of exclusivity of the relationship;

(c) the conduct and habits of the persons in respect of household activities and living arrangements;

(d) the degree to which the persons hold themselves out to others as an economic and domestic unit;

(e) the degree to which the persons formalize their legal obligations, intentions and responsibilities toward one another;

(f) the extent to which direct and indirect contributions have been made by either person to the other or to their mutual well-being;

(g) the degree of financial dependence or interdependence and any arrangements for financial support between the persons;

(h) the care and support of children;

(i) the ownership, use and acquisition of property.

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