A Guide to Cohabitation Agreements
Cohabitation agreements are often employed by people choosing to live together to set down practical guidelines about how their living arrangements will work from a legal perspective. They can offer peace of mind and clarity, helping everyone involved to understand their rights and responsibilities in all circumstances.
Whether you are living together through a commercial arrangement (such as a joint house purchase between brothers) or are an unmarried couple, cohabitation agreements can clarify the nature of the relationship between cohabitants, making it much easier to deal with any issues that arise - especially if the arrangement breaks down.
Read on for more information about how cohabitation agreements work and are arranged, straight from the family law experts at Clough & Willis.
Cohabitation agreements: the basics
Cohabitation agreements serve as an express declaration as to how property will be held, the circumstances in which it should be sold, and how the proceeds shall be divided on sale.
They can also cover other ancillary matters, such as the respective contribution to utility bills, mortgage payments, insurances and other household expenditure by the parties, as well as the consequences, if any, of not abiding by any particular term of the agreement.
These contracts function almost identically to separation agreements, with the exception of their timing - cohabitation agreements are created at the commencement of the arrangement, while separation agreements are created at the end.
How are cohabitation agreements arranged?
Before moving in together, it is worth taking advice on what rights you have, where you and your cohabitants might stand in all situations, and what your responsibilities will both be towards the property and to each other. A cohabitation agreement would then be formed as a legal declaration as to how you would wish the property to be dealt with in the event that the arrangement broke down.
When a dispute arises, your solicitor will need to know:
- The history of the relationship
- A list of both your own assets and those of your cohabitant
- The value of the property
- The contributions you might each have made to the value of the property
- Details of your earnings and whether you have any children
If a property is already owned and is to be dealt with in an agreement as part of capital introduction or other financial assistance, the full circumstances should be explained to a solicitor so they can properly advise you.
How should cohabitation disputes be handled without an agreement?
If you move in with someone and the house is only in their name, then without a cohabitation agreement, you may have no right to the proceeds from a sale, unless you can prove a substantive financial contribution to the deposit, house or mortgage payments. It will need to be shown that this came at your financial expense, and that you were promised a share in the property in return.
Even if the house is not in your name, you may have a right to continue to live there in the event of a seperation, even if asked to leave, especially when children are involved.
If a property is not held under joint ownership, there is no automatic right to inherit this property if a partner dies, unless the matter is dealt with in their Will. Even in cases where the property is held under joint names, automatic inheritance may not always apply - this is something that should be investigated with the help of a solicitor.
How legally binding are cohabitation agreements?
Following a recent House of Lords decision, cohabitation agreements can potentially be the last word on the division of the proceeds of a house sale, and when a sale should take place, provided that they are properly executed and subject to the criteria required by the courts.
If the agreement deals with how the proceeds of the sale of a house are to be divided, it should be prepared in conjunction with a conveyancing solicitor - for example at the time the property is purchased.
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At Clough & Willis, we have a great deal of experience in dealing with different types of family matters. Our team of specialist solicitors will provide clear, easy-to-understand advice to guide you through what can be a stressful legal process and will work our hardest to get you the best possible outcome for you