Common-Law Agreements in BC: What Lawyers Provide & Why They’re Important

Wiki Article

When two people live together in a marriage-like relationship in British Columbia (but are not married), they may become “common‐law” partners under the law after certain conditions. Common-law couples have many of the same rights as married couples, especially in relation to property, support, and debts. A properly drafted agreement can help clarify expectations and protect both partners. BC Common Law Agreement Lawyers are often called cohabitation agreements.

Here’s a detailed breakdown of how these agreements work, how lawyers help, and why they matter.

What Does “Common-Law” Mean in BC

In BC, a “spouse” (for many family law purposes) includes a person who has lived with another in a marriage-like (conjugal) relationship for at least two years, or who lives together and has a child together.

Once that threshold is met, certain legal rules apply as though the partners were married: sharing of property acquired during the relationship, division of debts, potentially spousal support, etc.

If no agreement is in place, then statutory rules apply under BC’s Family Law Act. Without a written cohabitation agreement, default rules determine what is “family property,” how debts are split, etc.

What Rights & Obligations Common-Law Partners Have by Default

If you and your partner meet the common-law criteria and there is no agreement, then typically:

Property and Debt Division: Property acquired during the relationship is usually divided equally upon separation. Debts acquired during the relationship are similarly shared.

Excluded Property: Property owned before you started cohabiting—e.g. a house bought before moving in, inheritances, other assets—may be excluded from division. However, increases in value of excluded property during the relationship often get shared.

Spousal Support: In certain cases, one partner may owe support to the other after separation depending on financial dependency, length of relationship, contribution, etc.

These “default” rules are helpful for many couples, but they may not align with what some partners believe is fair or want for their specific situation.

Why Use a Common-Law (Cohabitation) Agreement

A cohabitation agreement allows you and your partner to modify or opt out of some of the default rules. Some of the reasons couples choose to use them:

To clarify who owns what: Which assets are considered “separate” (excluded), what happens to jointly acquired property, etc.

To protect pre-cohabitation investments or assets brought in individually.

To define obligations for debts, support, living arrangements, or responsibilities during or after the relationship.

To reduce conflict, uncertainty, and cost if the relationship ends. Having things in writing helps avoid misunderstandings.

To set expectations about how property, support, or financial responsibilities will be handled in future life changes (children, business involvement, inheritance, etc.).

What Makes a Common-Law Agreement Enforceable

To ensure a cohabitation/common-law agreement holds up in court, BC law and court decisions require certain legal standards. Lawyers help ensure these are met. Key factors include:

Written Document: The agreement should be put in writing. Oral agreements are much harder to enforce reliably.

Signature & Execution: Both partners sign the agreement; ideally, having a witness. Proper dating and signatures.

Full Financial Disclosure: Each partner must reveal their assets, debts, income, and other relevant financial information. Hiding or omitting material info can lead to a court setting the agreement aside.

Voluntariness: No duress, no undue pressure. Each must understand what the agreement means, what rights they are giving up or retaining.

Fairness / Absence of Significant Unfairness: The agreement should not be grossly one-sided. If circumstances change significantly, courts can find parts of an agreement unenforceable if they result in unfairness.

Separate Legal Advice (Strongly Recommended): Each partner having independent legal advice strengthens enforceability. The advice helps ensure that each understands their legal rights and the implications of the agreement.

Clarity in Terms: Clear definitions (what is family property, what gets excluded), clarity in valuation methods, clear triggers for how things will be divided, and strong drafting so that terms are not ambiguous.

Review/Amendment Provisions: Life changes – children, income changes, new assets – may require revising the agreement. Including clauses to allow review or amendment is wise.

What Lawyers Do When Drafting Common-Law Agreements

Lawyers who work in this area typically assist by:

Conducting an initial consultation to understand both partners’ assets, debts, income, expectations, and goals.

Explaining the legal defaults under the Family Law Act, so clients understand what would happen without an agreement.

Helping gather documentation of finances, valuations of property, business interests, investments.

Drafting the agreement: preparing precise, tailored language to define property rights, obligations, support, excluded property, and special terms relevant to the couple’s situation.

Advising on potential future changes and ensuring that the agreement is flexible where needed.

Ensuring parties get legal advice, that disclosures are made, that the signing process is properly witnessed and documented.

Reviewing or updating the agreement over time if major life events happen.

Advising about risks, like what might happen if a court finds unfairness, or if a party tries to set aside parts of the agreement.

Common Challenges & Risks

Even well-intended agreements can run into problems. Some common pitfalls include:

Failing to include full financial disclosure, which can later become a basis for challenge.

Entering into agreements under pressure or immediately before major life changes (moving in, wedding, death in the family) which might suggest coercion.

Drafting vague or ambiguous clauses that leave things open to interpretation (“we’ll split fairly” without defining what that means, etc.).

Not considering growth in value of excluded property, or failing to address appreciation or business valuation.

Overly favouring one partner without fair compensation or recognition of contributions.

Ignoring or misunderstanding legal aspects of spousal support, child matters (parenting or child support) – courts may refuse to enforce clauses in agreements related to those matters if they conflict with the law or best interests of children.

When a Common-Law Agreement Might Be Set Aside or Challenged

Agreements are not immune to being overturned or modified. Courts in BC will consider setting aside or replacing agreements (in whole or part) if:

There was failure to disclose important financial information.

One party did not have capacity or did not understand what they were signing.

The agreement was signed under duress or undue influence.

It results in “significant unfairness” at enforcement time, considering changes in circumstances.

The timing or circumstances of drafting make it look like one party was pressured (e.g. right before moving in, just before a wedding, etc.).

Lack of independent legal advice or document showing that advice was given.

Cost & Practical Considerations

Lawyers usually charge for both partners’ legal advice. Costs depend on how complex the assets are, how many drafts or negotiations are needed, whether business valuations or appraisals are required.

Some law firms offer flat fees for simpler agreements; others charge hourly rates.

It’s wise to budget for updates if your financial situation or life circumstances change.

Ensure you get clear quotes in advance and understand what’s included: drafting, negotiation, legal advice, amendments, witnessing, etc.

Summary

A common-law (cohabitation) agreement in BC is an important legal tool for couples who live together without being married or who plan to. Without one, the law imposes default rules about property division, debts, and possible spousal support. But these defaults may not suit every couple. A well-drafted agreement, with legal counsel, financial disclosure, clarity, fairness, and flexibility, can give both partners control, reduce uncertainty, and protect interests.