When you and your partner decide to move in together it’s an exciting, significant milestone in your relationship and discussing a cohabitation agreement is probably the least romantic thing you could imagine doing, particularly given the implications that come with it.
But if you’re in the position where you own your home and your partner is moving in with you, you may not have considered the potential legal implications of your period of cohabitation if you were to later separate. You could well find yourself in the position where your ex is claiming a stake in the property, particularly where they have been contributing to the mortgage or contributing to any home improvements.
What is cohabitation?
Cohabitation is an arrangement where two people who are not married are living together, and unlike a divorce, there is no set of rules which apply when you split up with someone you have been cohabiting with.
At a time when more and more people are deciding to cohabit rather than marry, a cohabitation agreement has never been more relevant.
Contrary to popular belief there is no such thing as a ‘common law marriage’. Having a cohabitation agreement drawn up from the offset reduces the chance of disagreements later down the line.
Generally, a cohabitation agreement will deal with three main areas:
- Who owns what at the time of the agreement and in what proportions
- How you are each to contribute to outgoings whilst living together
- How property, assets and income should be divided if you should split up
Information about yourself, your cohabitee and any children, especially if they will be living at the property, will be required. You will also need to confirm that you have both received independent legal advice and that you have entered into the agreement voluntarily and of your own free will.
Like a Will, a cohabitation agreement is a living document and a review clause should always be included.
What Should I Include In My Cohabitation Agreement?
It is worth considering including the following in your agreement:
- Household contents and personal property such as cars
- Money in joint accounts
- Whether you wish to provide your partner with any financial support during or after cohabitation
- If children are involved, setting out arrangements to decide whom the children should live/spend time with after cohabitation
- Writing/updating your will as cohabitees have no automatic legal right to your estate if you die intestate
- How disputes should be resolved e.g. arbitration (potentially saving you a long and costly litigation process)
- Circumstances that can trigger a termination of the agreement, such as marriage or the death of your partner
A cohabitation agreement typically costs around £750 to £2,000 plus VAT at 20% (depending on value of house and the complexity of the agreement). But it is a good investment if you compare this to the potential costs of a dispute if you were to separate.
If you are purchasing a property with the assistance of parents, a friend, or with a partner in unequal shares then you may also wish to consider using a Declaration of Trust setting out how the property is owned and in what shares. This is particularly important if there are multiple persons with a beneficial interest in the property as the Land Registry can only record up to four names on the legal title.
If you are considering a cohabitation agreement or simply want more information, give our Family Law Team a call on 0161 930 5151 or email familyteam@gorvins.com