Cohabitation Agreement

If you live with your partner, or you are planning on living together (whether as a heterosexual or same sex couple), you can enter into a cohabitation agreement (sometimes called a living together agreement). This can set out the ownership of existing assets (including property), what your financial responsibilities will be towards each other and how savings and jointly owned assets will be distributed should you later split up.

More and more couples now choose to live together before they get married or enter into a civil partnership, or choose never to have their relationship legally recognised at all (by marriage or civil partnership). However, cohabiting does not entitle you to the same legal rights as marriage or civil partnership as it does not bind you together in the eyes of the law. For couples who are living together or have shared assets, this can lead to issues and uncertainties upon separation.

In reality, you have no express legal rights in a relationship if you are not married or in a civil partnership except in respect of jointly owned assets.

The cohabitation agreement sets out who owns what and in what proportion in the relationship and covers elements such as the following:

• Ownership of property
• Deposit on your home
• What share of the mortgage or rent you will pay
• How household bills will be dealt with
• Bank accounts and money
• Life insurance
• Pensions
• Assets such as cars, furniture, other property, jewellery
• Payment of debts
• Pets
• Next of kin rights

Pension access, property title deeds and wills should also be considered.

Although each cohabitation agreement is different and depends on your individual circumstances, there are a few key elements you should think about before seeking advice from a solicitor:

Property owned before moving in together—if one partner owns property, a cohabitation agreement can agree for this to be kept separate and prevent the other partner from having a claim over it. However, if the partner who does not own the property makes contributions to the mortgage or carries out renovation work, they could have a claim to the property in the future, so this is something to look out for.

Property bought while living together—if you buy a property while living with your partner and only one of you is named on the agreement, this will need to be addressed in the same way as above. If you are named as joint owners, you are both legally entitled to stay in the property if you should break up. You will need to think about what will happen to the jointly owned property upon separation – for example will it be sold?

Household bills—if you and your partner are not joint owners of your home, or one of you contributes more than the other, one of you could agree to contribute to the mortgage but acknowledge that this will not give that person any claim over the property.

Inheritance and wills—it’s important to remember that if you are not married or in a civil partnership, you will not automatically inherit each other’s estates if one of you dies. If you want to leave anything to your partner, you will need to draw up a will and keep it up to date.

Independent legal advice—when drawing up a cohabitation agreement, you will both need to seek independent legal advice to ensure that it’s binding and there is no doubt as to what you are both agreeing to. By doing this, the court is much more likely to take notice of your agreement and put it into effect if you were to break up. There should also be disclosure of your financial situations. The document should be executed as a deed.

Many couples are under the assumption that, if they are living together but unmarried or not in a civil partnership, then ‘common law marriage’ protects them in the same way as married couples. However, no such law exists. Couples who live together do not have the same legal rights as married couples or those in a civil partnership so this assumption is a myth.

A cohabitation agreement can provide peace of mind in your relationship. By coming to an agreement before or whilst you are living together, you will:

• have a clear understanding of what your financial commitments are
• avoid misunderstandings regarding your rights and responsibilities as you continue to live together, in particular with regards to ownership of property
• avoid difficulties and disagreements if you split up
• have clear evidence of your intentions should you have to go to court

It can protect either or both of you in the event of a relationship breakdown. It can operate in a similar way to a prenuptial agreement by making it clear how the pre-owned assets of one partner are to be shared with the other if you should break up in the future or if the property is owned in the sole name of one party and another party moves in. It can make it clear for both partners that contributions towards utility bills by one partner may not entitle them to a share of the property itself if you should break up.

It can also protect the economically weaker partner. For example, if you are a parent who has given up your job to care for the children, and the family home is owned in your partner’s sole name, your contributions in looking after the home and raising the children would be recognised as an equal contribution if you were married or in a civil partnership. If you are unmarried or not in a civil partnership, you could be left with nothing, even if your partner had financially supported you for several years.

As cohabitees, if you own property jointly, the starting point is that it is divided 50/50 on separation as joint tenants, even when one partner contributed much more to its purchase, unless you make a written agreement to declare different shares, (such as a tenancy in common). There can be exceptions to this and you should take legal advice.

To make sure that your joint intentions on setting up home together are enforceable and will provide the protection you each seek, a cohabitation agreement is vital.

As you do not have the same rights as a married couple or a couple in a civil partnership when cohabiting, a legal document such as a cohabitation agreement (as well as a will) can be useful if you separate – the hope is that you have dealt with the issues from the outset and it will therefore hopefully avoid expensive litigation and provide an accurate reflection as to the intentions of both parties when living together.

A cohabitation agreement can be reviewed and amended periodically, by consent.

A cohabitation agreement is a legal document, enforceable by the court if it is properly executed and providing you have both been honest about your finances and each obtained separate legal advice upon its terms.

Our highly experienced family lawyers are experts in this field and have helped many couples setting up home, or already living together, to draw up agreements that are tailored to their own individual needs.

In order for your cohabitation agreement to be valid, the following conditions must apply:

• You should both enter into the agreement freely and voluntarily
• The agreement should be set out in the form of a deed
• Each of you must sign the document
• You must keep the agreement up to date with any major life changes