Do I need a Cohabitation Agreement? BLM Family Law responds
Do I need a Cohabitation Agreement?
Have you fled the nest? Are you living with a partner who you are not married to? Whether you own a property or you are renting, you may want to consider entering into a cohabitation agreement.
What is a cohabitation agreement?
A cohabitation agreement records arrangements between two or more people who have agreed to live together as a couple or otherwise and records what happens in the event that cohabitation ends.
Why should I enter into one?
There is no law in England & Wales which recognises the rights of cohabitating couples. The age-old myth of a ‘common law marriage’ or ‘common law spouse’ does not exist, regardless of how long you have been living together and whether or not you have children together.
It is therefore sensible for cohabiting couples to enter into a cohabitation agreement to ensure that their position is safeguarded on separation.
When should I enter into one?
There is no set rule as to when you should enter into a cohabitation agreement. It can be entered into at any time, before or after cohabitation has begun. However, if a property is being purchased and you intend to live in it on completion, it is sensible for the agreement to be entered into on completion.
What does it cover?
A cohabitation agreement can cover a range of matters and can be tailored to your individual circumstances. Standard provisions include recording:
- each party’s legal and beneficial interest in the property.
- each party's rights and responsibilities in relation to the property where they live or intend to live together.
- financial arrangements between the parties during cohabitation, such as how bank accounts will be dealt with and how the mortgage, rent and other household expenses are to be paid, by who and in what proportions.
- financial arrangements between the parties if they decide that they no longer want to live together, such as what should happen if one party wants to sell the property and the other does not, buy-out provisions, how and by whom the property is to be valued, how the costs of sale are to be paid and how the net proceeds of sale are to be divided.
- how personal property is owned during and after cohabitation, such as who owns the car, the TV or the lovely piece of art work sitting above the mantel piece.
- what will happen to any family pets.
There are many advantages of entering into a cohabitation agreement.
Firstly, it avoids disputes on separation and the costs and stress associated with court proceedings, as your intentions on separation will be clearly set out in the agreement.
Secondly, it provides you with autonomy and flexibility to organise your financial affairs as you wish. The law does not currently require cohabitees to support one another either during cohabitation or after it ends, but some cohabitees may wish to do so. A cohabitation agreement can provide for this and can record that one party will pay the other party maintenance at a specified time, at a specified rate and for a specified period. Alternatively, a one-off lump sum payment or series of lump sum payments could be made.
Thirdly, if you and your partner have a child together, the agreement can include a clause outlining the financial provision to be made for that child on separation, including where and with whom the child is to live and when the child is to spend time with the other parent.
Fourthly, it can protect family money, for example, a cohabitation agreement can record gifts or loans from parents towards a deposit.
The primary disadvantage of entering into a cohabitation agreement is that it is unclear whether it would be upheld or enforced by the court and rather unfortunately, there have been no recent cases testing this point.
That said, a cohabitation agreement is much more likely to be upheld if it complies with ordinary contractual principles, meaning that it is in writing, makes clear on its face that it is intended to be a deed and is validly executed as a deed, i.e. signed and witnessed. In addition, the agreement should not be capable of being challenged on the grounds of fraud, duress, undue influence, misrepresentation, mistake and illegality on other grounds.
A cohabitation agreement can also not exclude the power of the Child Maintenance Service or the court to make financial provision for a child upon separation.
It is important that a cohabitation agreement is drafted properly and that you seek specialist independent family law advice from a solicitor to ensure that the agreement includes all the necessary and appropriate terms and has the best possible chance of being upheld. The family department at BLM can help.
Disclaimer: This document does not present a complete or comprehensive statement of the law, nor does it constitute legal advice. It is intended only to highlight issues that may be of interest to customers of BLM. Specialist legal advice should always be sought in any particular case.