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Cohabitation Agreements

A Cohabitation Agreement is a formal written agreement entered into by parties living together in a relationship outside marriage (either heterosexual couples or gay couples). The purpose is to regulate the rights of the parties in the event that the relationship breaks down because cohabiting couples do not have the same rights as married couples under the law.

 

Is it enforceable in court?

 

Cohabitation Agreements are not currently binding at law. Increasingly however, Judges are placing greater weight on the contents when they are submitted as evidence to the court following a breakdown in the relationship.  It is important for both parties to obtain independent legal advice before entering into such an agreement to avoid a claim by one party that he/she was forced to sign it against their will.

 

Why bother?

 

There is a growing need for new laws to cover cohabiting couples who separate and until the law does change the only limited protection available is to have a Cohabitation Agreement.

 

If you are thinking of setting up home with another person then you must think about what might happen if you decide to break up.  This is because the law concerning couples who live together is much less straightforward than the law governing married couples.  When partners of many years break up they find that they do not have anything like the financial security that a married couple going through a divorce has.  It is a common misconception that, after living together for a while, a couple becomes common-law husband and wife with much the same rights as legally married couples.  However the term “common-law spouse” has no legal meaning at all.

 

A Cohabitation Agreement is sensible where only one of you owns the home you both intend to live in or you both own the home but in unequal shares as "tenants in common". The agreement can state that all property owned by each of you prior to the date of the agreement shall remain yours in the event of separation and can set out what should happen to property acquired jointly after the date of the agreement. The agreement can also include terms relating to bank accounts, credit arrangements, living expenses and what will happen to the home in the event of separation.

 

It is advisable that you both also make Wills as without a Will, on your death any assets owned by you will go to your next of kin and not to your partner.

 

Advantages

 

The main advantage of Cohabitation Agreements is that they help clarify financial commitments.  Long-term relationships, especially those involving children, have a “business” dimension as well as a romantic bond.  Balancing the budget between income and outgoings, working out who pays for what and how responsibilities are shared in running the home - all of this needs organising to ensure a harmonious home life.

 

Putting an agreement in place allows you to plan ahead and make contingency plans for future or unexpected events such as another child, separation, long-term illness or death.

 

Disadvantages

 

The down side of a Cohabitation Agreement is that thinking about and talking through all the issues that should be covered – including death, separation and illness is difficult emotionally, particularly if only one of you wants to look at the possibility of the relationship running into problems later on. 

 

What to do now

 

A solicitor can advise and draft a Cohabitation Agreement and ensure a fair arrangement is entered into.  Each party will need independent legal advice, even if all matters are agreed beforehand.

 

For more information please contact:
Bells Solicitors Limited.   Registered in England and Wales no. 07827988.   Authorised and regulated by the Solicitors Regulation Authority.   SRA number 569030.   VAT registration number 137595285