Cohabitation Agreements

Despite popular belief, there is no such thing as a common law marriage. A couple who cohabit do not share the same legal rights as those who are married or in a civil partnership.

Often, however, a couple who live or have lived together will have made joint investments, such as buying a property or opening a joint bank account. The division of these assets will need to be addressed should the couple separate.

One way of doing this is via a Cohabitation Agreement.

What is a Cohabitation Agreement?

A Cohabitation Agreement is a legal document entered into between two people who are unmarried or not in a civil partnership who live, or intend to live, together, either after buying a property together in joint names or moving into a property already owned by one party.   A Cohabitation Agreement sets out arrangements for how a property is owned, how financial contributions to the property are treated and what happens if either party dies, or the relationship comes to an end.

What are the benefits of a Cohabitation Agreement?

As cohabiting couples’ rights to financial provision are extremely limited and not automatic in the same way as for married couples (regardless of the length of the relationship or whether there are children together) it is important for such couples to agree and record the position so there are no disputes or misunderstandings when the relationship comes to an end. Contrary to popular misconception there is no such thing as “common law marriage”.

Are Cohabitation Agreements legally binding in the UK?

Whilst Cohabitation Agreements are not legally binding in the sense of being enforceable contracts, they provide clear evidence of the parties’ intentions, which is a central factor when resolving any future disputes. This may change in the future as the current labour government, prior to entering office, did indicate that cohabitation law reform was on their agenda.

When is the best time to draw up a Cohabitation Agreement?

You can enter into a Cohabitation Agreement at any time but ideally the document should be drafted before you move in together or complete on the property purchase or transfer of equity, so the agreement is in place at the outset.  In the circumstances, if you are contemplating moving in with your partner, or buying a property with them, it would be sensible to seek advice at an early stage.

What type of thing can be covered in a Cohabitation Agreement?

A Cohabitation Agreement can set out how the property is held “beneficially” which may differ from how the legal title is recorded at the Land Registry. For example, a property could be considered as a joint asset but only registered in one of the party’s names, even though both parties might have contributed to the deposit.

The parties also may be paying equal amounts for the monthly mortgage repayments and may have agreed that this will be reflected in the split of equity in the event that the property is subsequently sold. Alternatively, it may be that the couple do not want unequal mortgage contributions to change the proportion in which they hold the property.

If a couple plan to undertake renovations on the property and want to ensure that any particular contributions to those renovations are reflected in the division of equity on a sale, then that can also be covered in a Cohabitation Agreement. A Cohabitation Agreement can also record what happens if one party becomes seriously ill, passes away or the relationship comes to an end.

A Cohabitation Agreement can also cover intended arrangements (both financial and living) for children in the event of the relationship breaking down.

How much does a Cohabitation Agreement cost?

The precise cost for a Cohabitation Agreement would depend on the circumstances of the individuals in question and how detailed or complex they wish the agreement to be. Please get in touch with a member of the family law team if you would like to discuss matters further.

How does a Cohabitation Agreement differ from a Pre-Nuptial Agreement?

A Cohabitation Agreement is for unmarried cohabitees or cohabitees who are not already in a civil partnership. A Pre-Nuptial Agreement is for couples who are intending to marry or form a civil partnership. Whilst both types of agreement outline the parties’ respective financial responsibilities and rights, as the legal position for married and unmarried couples is different then a different type of agreement is required in each scenario.

Do you need a solicitor to draft a Cohabitation Agreement?

It is highly recommended that you retain the services of a specialist in family law to assist with the drafting of a Cohabitation Agreement and advise on the terms of it. A member of Roythornes family law team can explain the terms and legal effect of any Cohabitation Agreement and ensure that the agreement is tailored to your specific circumstances.

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For further information about our family services, get in touch with our team in Alconbury, Birmingham, Nottingham, Spalding or Langham.