A cohabitation agreement is a legal document between unmarried couples who live together, either after buying a property together in joint names or moving into a property already owned by one party.
The agreement sets out arrangements for how the property is owned, how the financial aspects are split, what happens if either party dies, or the relationship ends.
When is the best time to draft a Cohabitation Agreement?
The ideal time to draft the Agreement is before you move in together or the ownership of the property is confirmed to the Land Registry on completion of a purchase, or transfer of equity. You will need a specialist family lawyer to assist with drafting the agreement to ensure it is as legally binding as possible. Whilst cohabitation agreements are not legally binding by way of a legal statute, they show the parties intention which is a central factor when resolving any future disputes.
What are the main reasons for drafting a Cohabitation Agreement?
- Your rights to financial provision are limited and not automatic in the same way as married couples, regardless of how long you have been together or have children together. There is no such thing as ‘common law spouses”. Even if you plan to marry in the future, a cohabitation agreement can protect your position before marriage, should the relationship end or one of your passes away.
- It is a legal document that can set out how the property is owned ‘beneficially’ which may differ from the legal title shown at the Land Registry. For example, the property is considered joint but only registered in one parties’ name for financial reasons such as mortgage raising ability but you both contributed towards the deposit etc.
- You may be paying unequal amounts towards the monthly mortgage payment and you have agreed that this will be reimbursed to you if the property is sold, or you do not want the unequal contributions to change the ownership percentage. For example, your partner is moving into your property and paying towards the mortgage and bills, but you agree they will not have a share in the equity if the property is sold.
- You plan to do renovations on the property, and you want to ensure you are reimbursed should the property need to be sold if you split up.
- You would like to record what will happen if one party becomes seriously ill, passes away or you end the relationship such as when one party will move out, who will pay the bills, when they will hand keys back etc.
Do you need a cohabitation Agreement?
If you would like to discuss whether you need an agreement and the costs involved, or you are being asked to a sign an agreement, you may benefit from specialist legal advice.
Unfortunately, we are only able to act for one party in the drafting the Agreement and you should both take independent advice before signing.
If you require any assistance, please contact our family team who will be happy to arrange an initial meeting to discuss your situation.