What is a Cohabitation Agreement ?
I regularly speak with people who assume they are Common Law Husband and Wife because they have lived with their partner for a period of time and therefore they have legal rights which protect them. Unfortunately this is a common held misbelief that couples who have been living together for a defined period of time, such as 6 months or 2 years, acquire the same rights as those who are married. This is NOT the case.
What Rights do Unmarried couples Have?
The quick answer to this is not a lot. You may be able to make limited claims, for example, if you have contributed towards a property that you do not own or for financial support for children of the relationship. Your legal interests equate to those of a business relationship or a friend. Can you imagine having your friend lodging with you for 12 months and then saying they have an interest in your house. Just because there is an emotional attachment or even a child does not mean the situation changes. Emotional attachments do not acquire legal rights.
As a result of this we would advise when you are looking to start to live with your partner or have been for some time, to consider having a discussion about your intentions about ownership of property ie if your home is in one person’s name but the other person is paying the mortgage or contributing in other ways, what are the intentions behind those financial contributions. We would then advise that whatever those terms are that you agree be recorded within a Cohabitation agreement.
A cohabitation agreement is a legal agreement between a couple who live together but who are not married or in a civil partnership.
The agreement can cover issues such as payment of the rent or mortgage, bills, savings, debts and what will happen to shared assets if the relationship should end.
Putting a cohabitation agreement in place
A cohabitation agreement will set out the decisions that you make about their finances and other issues, giving both parties the reassurance of knowing what their position would be in the future if they were to separate.
Having an agreement in place can reduce the risk of misunderstandings and disagreements arising. It can also protect the partner in the weaker financial position, for example, a parent who gives up their job to raise the couple’s children and secure a better positive co parenting relationship for children of the family minimising conflict at a very vulnerable time.
If the couple does split up, having a well-drafted agreement in place will usually mean there is no need for litigation, which is generally time-consuming and expensive.
Is a cohabitation agreement legally binding?
A cohabitation agreement will generally be enforced by the courts provided that it was drawn up with the intention of being legally binding and executed as a deed in the presence of witnesses. It must not be unfair and both parties should take independent legal advice before signing.
What to include in a cohabitation agreement
A cohabitation agreement can cover whatever issues you choose and your solicitor will be able to give you guidance as to what will be appropriate in your circumstances.
An agreement will often include the details of what will happen in respect of the following in the event of a separation:
• Ownership of property to include property owned previously and property bought or lived in together
• Financial provision for children of the relationship
• Savings, investments and bank accounts
• Pension provisions
• Payment of mortgage or rent
• Payment of bills
• Who will be responsible for debts, to include debts accrued by one person and debts that already exist
• Ownership of valuable items such as cars, jewellery and art
• Custody and care of pets
Agreeing the terms of a Cohabitation Agreement
I always feel that Cohabitation agreements like pre nuptial agreements are quite sensitive topics to raise within your relationship. You are effectively anticipating the ending of your relationship and could be raising some really sensitive issues. However statistically you are more likely to separate than win the lottery and the majority of us have talked about what we would do if we won the lottery. So it’s a sensible and realistic approach.
However, whilst we would always recommend that the Agreement itself be subject to separate legal advice, there is no reason why you couldn’t both address these issue with a Family Lawyer Mediator who could work with you both to help you both understand the legal, practical and technical implications of the proposed terms before officially recording the same. This helps you to have those difficult conversations but in a controlled way.
Reviewing a cohabitation agreement
It is recommended that a cohabitation agreement should be reviewed every five years or in the event of any major life events such as the birth of a child. If you decide to get married, you should take advice about replacing the cohabitation agreement with a prenuptial agreement.
Is a cohabitation agreement legally binding?
The courts will generally follow the terms of a cohabitation agreement, provided it is satisfied on certain points, including the following:
- The agreement has been drafted and executed as a deed
- Both parties have taken independent legal advice as to the implications of the agreement before signing
- They both understand the effects of entering into the agreement
- The provisions of the agreement meet the needs of both parties and the agreement is fair
- Neither party was under any pressure or duress to sign
- Both parties have made full financial disclosure to each other before the agreement was drawn up
The advantages of a cohabitation agreement
As well as encouraging openness and honesty, a cohabitation agreement gives the parties a chance to consider their financial position for the future and to try and ensure that both of them are treated fairly. This can be particularly important if, for example, one of them is likely to give up their career to raise children.
It also reduces the scope for disputes during the relationship, by ensuring that both parties clearly understand their rights and responsibilities.
In the event that a couple does separate, the existence of a cohabitation agreement can make the process much simpler and less contentious than it might otherwise be.
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