A cohabitation agreement is a written legal agreement between a couple who are living or intend to live together but aren’t in a marriage or in a civil partnership.
In the last 5 years there now seems to be a trend that couples choose to live together rather than to marry it is becoming increasingly common for couples to have a cohabitation agreement, sometimes known as a living together agreement, drawn up.
As we now live in a generation where parties amass personal financial growth solely, prior to entering into a relationship, it is therefore important to protect those assets such as property you have purchased prior to entering into a new relationship or if your partner is intending to live with you.
Rights for an individual that is cohabiting are very different than for a married person. The laws in place to provide leg
al protection and clarity for married couples have been in place for years. However there no such laws that apply to unmarried couples.
To most individuals there is a misconception that couples are protected by the ‘common law marriage principle’. Unfortunately, there is no such thing as a common law marriage. Furthermore, there are no rights of common law spouses. For example, if you live with your partner in their house and it is owned solely by them, you don’t necessarily have a legal interest in their property if you separate.
Why do I need a cohabitation agreement?
The Importance of having a cohabitation agreement is so that if you are setting up home with a partner and want to protect yourself financially should the relationship breakdown in the future, a cohabitation agreement would accommodate this.
A cohabitation agreement can be for any individual, with high net assets to a normal stand of living.
Couples choosing to live together do not have any of the protections offered by law to married couples. Cohabiting couples are therefore much more vulnerable on the break-up of the relationship or the death of one party. A cohabitation agreement can provide a measure of protection in these circumstances.
If you live with your partner in a house they own or rent in their sole name, and there’s no other agreement or understanding in place, you will have no automatic right to stay if they ask you to leave.
The Family Courts have powers to deal with property rights on divorce, for unmarried couples they can only determine who owns the property and in what shares on the basis of actual contributions and/or their intentions.
The first consideration will be whose name is on the deeds of the property. If your name doesn’t appear it starts to get complicated and certainly there are no automatic rights to stay in the property or to receive a share in the proceeds of a sale. It may be difficult to prove actual contributions and on separation the parties may not agree what their original intentions were.
If there’s no other agreement in place, your partner will walk away with all the savings and possessions in their name. Where you bought things together, but each contributed different amounts, you own in the shares in which you contributed, although this can be difficult to prove.
A cohabitation agreement is important for a couple buying a house together, running a business together or planning to have children together. If one of the parties had previously been married and divorced, they may wish to protect the assets which are in their sole name. In all instances a cohabitation agreement can help.
What to include in a cohabitation agreement
A cohabitation agreement provides the framework for couples to record their intentions and record their respective contributions. The terms to be included in the agreement are a matter for the parties involved, however it is likely the agreement will include details about:
Property owned before moving in together, especially if you plan to live together in that property and jointly pay the mortgage for example.
Property or possessions you acquire after moving in together, whether you buy them together or individually, how do you consider them to be owned?
Household expenses (utility bills, Council tax, and grocery shopping and mortgage payments), who will pay for what?
Children and how you will co-parent should the relationship end.
The Cohabitation agreement needs to be precise and detailed and confirm that both the parties intend to create legal relations which will then ensure that the agreement is enforceable. When it comes to property the parties may be advised that a Deed of Trust be drafted which sets out the ownership and respective beneficial interests in the home.
Are cohabitation agreements legally binding?
A cohabitation agreement is a form of contract and is legally binding provided it is drafted correctly, both parties take independent advice on the content and it is signed as a deed.
It is essential both parties take legal advice, from a suitably qualified family lawyer, before agreeing the contents of a cohabitation agreement. It is also advisable to review your agreement if circumstances change dramatically, for example if you have children, receive a significant inheritance or financial windfall.
A cohabitation agreement is a good way to prevent disputes in the event that you separate from your partner. If you are in dispute with an unmarried partner this blog containing useful Questions and Answers concerning Cohabitation Disputes might help.
If you are in need of advice regarding a Cohabitation Agreement or you are moving into a property with your partner please contact Sunny Sidhu, Family Solicitor at Seymours Solicitors on 01926 424182 to arrange a 30 free minute telephone appointment to discuss your matter.