What is a cohabitation agreement?

What is a cohabitation agreement?

Sometimes called a ‘living together’ agreement, a cohabitation agreement is a legal document that sets out the rights and responsibilities of a couple who live together, the ownership of assets (including property), and what should happen if the relationship breakdowns later.

While it is a commonly held belief that living together, particularly if you’ve lived together for a while, makes you common law partners and gives you the same legal protection as married spouses or a couple in a civil partnership. However, this is not the case. The truth is that, without a legal agreement between the two of you, you don’t have any set legal rights regarding jointly owned assets.

Cohabitation agreements are a good way for couples who are not married or in a civil partnership to protect their rights and assets in the event of separation, and to define legally their responsibilities to one another.

What can a cohabitation agreement include?

A cohabitation agreement can cover a wide range of areas, though the exact content will depend upon your circumstances. It should set out who own which assets, either outright or as a proportion, and could cover things like:

• what each person’s share of the mortgage or rent is
• how the bills should be handled
• how ownership of any property should be split
• the ownership of any other assets, such as cars, furniture, and other high-value items
• how other financial issues should be dealt with, including life insurance, pensions, bank accounts, and the payment of debts
• ownership and responsibility of any pets

Why is a cohabitation agreement important?

Common law marriages are not recognised in UK law, which means many cohabiting couples have no legal protection or rights regarding property and finances in the event of a relationship breakdown.

A cohabitation agreement rectifies this by giving both parties assurances of how assets and finances will be handled if they should separate. Setting up a cohabitation agreement can help to:

• define agreed upon terms for things like payment of the mortgage or rent, household bills, debts, and the ownership of assets
• avoid any potential disagreements or friction regarding property and finances before you move in together by setting out responsibilities from the start
• provide a clear breakdown of assets and responsibilities in the event of a relationship breakdown, so you don’t have to negotiate when tensions may be high
• clearly set out your ownership and legal rights should issues need to be taken before a court

Is a cohabitation agreement legally binding?

Yes, a cohabitation can be legally binding, but it must be set up correctly.

A court will enforce a cohabitation agreement if it can be shown that the agreement was drawn up and properly executed, and that both parties in the relationship were honest about their financial situation prior to the agreement being signed. You should both also have taken independent legal advice regarding the terms of the agreement.

How do I make a cohabitation agreement?

Before you begin thinking about what should or should not be included within a cohabitation agreement, it is important that both parties in the relationship seek independent legal advice to ensure that you both understand your rights and how an agreement could affect you – both during your relationship and in the event of separation.

You will then need to carry out a full financial disclosure. This is when you disclose to your partner and their legal representatives the full scale of any assets, debts, and income in your name.

It is crucial that you are upfront and honest about your situation, as the agreement could be considered void or invalid by a court if it is later found that you concealed anything.

Industry-leading legal support for cohabitation agreements

The Law Commission has acknowledged that with more couples cohabitating, there should be changes to the law to protect cohabitees. However, no legislation has been put in place to protect them, so it is important, if you do live with a partner but are not married, that you consider your legal position.

No one expects their relationship to break down, but knowing where you would stand if it were to happen can help you to plan ahead – for instance, knowing what share of the house you would each be entitled to may be relevant in helping you decide what each of you will contribute towards the mortgage bills, what arrangements you will put in place if you have children, and more.

Our family law experts are on hand to offer any advice you need. Contact us today.