Cohabitation Agreements

Are you planning to move in with your partner or purchase a property for you both to live in? If you do not plan to get married, the law offers only limited financial and legal protection in England and Wales, which means it is important to consider a Cohabitation Agreement. 

Your Cohabitation Agreement can cover a range of issues, including:

• Who pays what share of the rent or mortgage
• Who is responsible for paying which bills
• How you plan on using a shared bank account
• Who is responsible for any debts you incur while living together.

What is a Cohabitation Agreement?  

A Cohabitation Agreement is a legal document drawn up as a deed; it sets out the terms of your relationship and your agreement to live together as an unmarried couple. It helps to establish a framework of what you both agree to do whilst you live together and what would happen if you were to separate.  

A Cohabitation Agreement can be prepared when unmarried couples are:

• Moving in together but do not intend to marry or enter into a civil partnership
• Purchasing a property to live in together as their home, whether jointly or in one party’s sole name
• Already living together but want to clarify their intentions.

What can be included in a Cohabitation Agreement?

A Cohabitation Agreement can cover how you as a couple will own your home, including the extent of interest each of you has in it, as well as how the mortgage repayments and household bills will be met, how any joint bank account will operate, how repairs and renovations will be funded and what will happen should you separate.

A Cohabitation Agreement can help to clarify who owns what and in what proportions. It can also clarify who owns certain contents, personal belongings and savings.

In addition to a Cohabitation Agreement, unmarried couples who decide to purchase a property together in joint names should enter into a Declaration of Trust at the time of purchase to set out what share they each own in the property. This is especially the case if you each wish to own it in unequal shares or have contributed unequally to the purchase price and associated costs. This will help to avoid the risk of a cohabitee dispute in the future about how the equity in the property should be shared between you both should your relationship break down.

Why is a Cohabitation Agreement necessary?

Unfortunately, when a relationship breaks down, unmarried couples do not benefit from the same legal rights as married couples, and it doesn’t matter whether it was a long term relationship or otherwise. If you are planning to move in with your partner, you should consider having a Cohabitation Agreement drawn up as it will offer you protection in the future should the worst happen and you were to part.

Unlike their married counterparts, couples living together outside of a marriage or civil partnership do not have automatic claims against one another for financial support or maintenance, or for a share of assets such as the family home, other property, bank accounts, investments, business assets or pensions. This can have significant legal and financial consequences in the event they separate or if one of them dies.

A Cohabitation Agreement can help to protect unmarried couples who live together and can create certainty in the event of a relationship breakdown. It can provide for the division of assets based on what you as a couple sees fair, rather than relying on the law, which may offer limited or no protection.

A Cohabitation Agreement can also provide particular protection for the financially weaker party who might not be an owner of the family home but who has contributed towards the home or in other ways throughout the relationship. 

Ultimately, having a Cohabitation Agreement in place has the potential to save you both a great deal of time, stress and money and can help guard against the risk of a potential cohabitee dispute in the future.

Is a Cohabitation Agreement the same as a Pre-nuptial Agreement?

Unlike a Pre-nuptial Agreement or Pre-Civil Partnership Agreement (which is an agreement made by a couple before they marry or enter a civil partnership to clarify ownership of their respective assets should the marriage or civil partnership fail), a Cohabitation Agreement is legally binding. So long as the formalities of entering into the agreement have been observed, it will be upheld by the court.

Cohabitation Agreements are used when a couple live together without marrying; Pre-Nuptial Agreements or Pre-Civil Partnership Agreements are used when a couple has the intention to marry or enter into a civil partnership.