The Supreme Court of British Columbia set aside the property provisions of a cohabitation agreement concerning a home appraised at $1.745 million. Although one spouse had reviewed and signed the agreement, the Court found that he had not understood the property rights he was surrendering. It declared the home family property, preserved both spouses’ excluded contributions and ordered equal division of the remaining equity.
The case shows why a signature, even after reviewing a draft, does not necessarily establish an informed agreement about existing property rights.
The Agreement Did Not Reflect the Parties’ Contributions
In Yu v. Lee, 2026 BCSC 1858, Raymond Yu and Anita Lee lived in a home registered in Lee’s name. Yu said he had contributed $110,000 toward its purchase and guaranteed the mortgage. Lee disputed his contribution and argued that the marriage-like relationship began only in 2021.
The Court accepted evidence of Yu’s financial contribution, including a cheque marked “house partnership,” and found that the parties had been in a marriage-like relationship since May 2014.
Nevertheless, their 2022 cohabitation agreement stated that the relationship began in 2021. Prepared by Lee’s lawyer, it identified the property as hers and purported to exclude any claim by Yu to it. After separating in 2023, Yu challenged those terms.
Reviewing a Draft Was Not Enough
Section 93 of B.C.’s Family Law Act permits courts to set aside property-division terms in specified circumstances, including where a spouse did not understand their nature or consequences. It also provides a separate basis for relief where an agreement is significantly unfair.
Yu had received a draft months before signing, annotated it and secured some changes. He understood generally that Lee wanted to protect her assets. But the final agreement failed to account for his purchase contribution and ongoing liability as mortgage guarantor, while requiring him to surrender his interest in the home.
Yu obtained no independent legal advice and declined to sign a proposed waiver of that advice. The Court did not find duress or improper exploitation by Lee. Instead, it found that Yu did not appreciate he was surrendering his excluded-property interest and presumptive share in the home’s value. The property terms were set aside under section 93(3)(c), and the Court also found them significantly unfair under section 93(5).
Lack of independent advice alone did not determine the result; it formed part of the broader assessment of understanding and fairness.
How the Home Was Divided
The Court recognized excluded contributions of $110,000 for Yu and $347,457.87 for Lee, with the remaining equity to be divided equally. The home was appraised at $1,745,000 and had a mortgage balance of $111,468.
Lee was given 90 days to retain the property by paying Yu $698,037.06, which included his excluded contribution, and securing his release from the mortgage guarantee. Otherwise, the property was to be sold and the proceeds distributed under the Court’s directions.
What Couples Should Take From the Decision
Cohabitation agreements should accurately record existing ownership interests, down-payment contributions and mortgage liabilities, particularly when signed years into a relationship. A home registered in one partner’s name can still be family property.
Independent legal advice helps identify the rights each party is giving up. Mortgage guarantees need separate attention: relinquishing an interest in property does not, by itself, release a guarantor from obligations to the lender. In this case, both the division of equity and the required release were addressed in the Court’s order.
