Do I really need to get one?

Unlike on divorce or civil partnership dissolution, there is no particular set of rules that automatically applies if you split up from someone you have been living with. There is no such thing as ‘common law marriage’ which is why a cohabitation agreement for unmarried partners is advisable. Living together with someone for a certain period of time doesn’t mean you are automatically entitled to some financial support or to share their property after you split up. There have been proposals to change the law but the government has said that it does not intend to do so at the moment. This means that where a couple has not been married or in a civil partnership, sorting out disputes about property without an agreement can be expensive and take a long time. A good cohabitation legal agreement can mean that areas of potential dispute on separation are reduced or eliminated. Many couples also find the process of making an agreement means that they have the chance to think and talk about how living together is going to work financially, meaning that arguments about money are less likely later on.

Do you need a deed of trust as well?

You can get a cohabitation agreement on its own or you can include a declaration of trust within it as well. If you include a declaration of trust as well then it will need to be signed as a deed with a witness.

Will the law change for cohabitants?

It is possible that the law might change in the future to give cohabitants specific rights. Under the current proposals, if you have an agreement about what you want to happen in the event of your separation, this will take precedence over any new scheme that comes in, but the position may change. You may need to review the agreement if you move house, have children or your circumstances change significantly. It’s important to ensure that the agreement is kept up to date. You should also make a Will so that if you die while living with someone, your wishes can be put into effect. Although it is possible in some circumstances for a cohabitant to inherit, there are no strict rules about what should happen so it is important that you make clear what you want.

What is a cohabitation separation agreement?

You most commonly get a cohabitation agreement drafted by a solicitor during the purchase of the property, however you can get it drafted during your ownership. If you did neither and agree how to share the property on sale or transfer then you would draft a cohabitation separation agreement; actually it is just called a separation agreement. A separation agreement will set out in writing the final terms of a separation. It can contain who gets pauid what, who gets the benefit to property such as furniture and even an agreement for both parties to never see each other again.

How much does a cohabitation agreement cost?

The cost depends on the detail you want in it. Whilst a detailed agreement can cost as much as £3,000 INC VAT, you can get a less comprehensive one for £700 INC VAT. The best advice is to not cut on protection to save on cost as the reason for having an agreement is to protect you whilst you share living in a property.

We offer a variety agreements for joint owners looking to protect their interest in a property. We can even help if there is now a dispute.

Give us a call on 0333 344 3234 or click to ask a question.

Cohabitation Agreement is a Living Together Agreement

by:

Andrew Boast

(Last Updated: 19/04/2022)

Created on:

19/04/2022

Read by:

279

6 min read

A cohabitation agreement is a legal document drawn up between joint owners of property and it is often signed as a deed in front of witnesses. It will generally deal with three principal areas:

who owns and owes what at the time of the agreement, and in what proportions;
what financial arrangements you have decided to make while you are living together; and
how property, assets and income should be divided if you should split up.

Where the agreement is properly drawn up, the terms are reasonable, and each of you has had separate, independent legal advice on its effect, a court is more likely to uphold the agreement in the event of a dispute. It can also be prudent to include provisions that address potential future events, e.g. the needs of any future children (family law is costly).

Joint owners often get a deed of trust which protects their beneficial interest, however it falls short on protecting the living arrangements between the joint owners. We can even draft a cohabitation agreement online.

The cost of a cohabitation agreement ranges from £700 to £3,000.

The more complex and time consuming to draft the agreement, the more expensive it'll be.

When should I draft an agreement?

You can make a cohabitation property agreement at any time, whether you are about to start living together or if you have been doing so for many years. Your cohabitation agreement lawyer can help you negotiate this agreement and can write it down in a way that it is likely to be respected by the court in case there is ever a dispute about it. You may also seek the assistance of a mediator to help the two of you talk about the potential terms of an agreement, or work out what should happen using collaborative law.

What could be included in a cohabitation contract?

Your shared home

It is important to record how this is owned, and whether there has been any separate agreement or promise that isn’t currently reflected in the legal documents. Who is paying the mortgage? If there are any endowment policies or other savings arrangements linked to a mortgage, what contributions are being made to those and how will they be dealt with if you split up? Are you going to insure each other’s lives? Your family lawyer may need to advise you about the implications of arrangements regarding your shared home as this is usually the most complicated area for people living together.

Money and paying bills

Many people find it convenient to have a joint bank account when they live together but need to decide what contributions they are going to make to that account. Will the contributions be equal and if not, will you consider the money in the joint account to be equally owned? What will the joint account be used for and when should your personal accounts be used instead? If you are not using a joint account, who will pay which of the household bills and will this be considered an equivalent contribution to something else? What about credit cards and debts?

Pensions

Often overlooked, pensions sometimes give you the opportunity to make provision for loved ones. You may wish, for example, to agree nominations for death-in-service benefits.

Personal possessions

You should consider who owns and/or will keep items such as furniture and cars. It may be worth setting down now any rules about ownership of important things or a way to sort out any disagreements about them in the event of a separation, for example, each of you picking in turn from a list of items.

Children

Although not legally binding, it is worthwhile thinking about whether you might like to provide for any children over and above the minimum expected by the child support system in the event of your separation (e.g. in respect of school or university fees), and to set down some expectations about how children would be cared for if you were to live apart.

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Written by: Andrew Boast

Andrew started his career in 2000 working within conveyancing solicitor firms and grew hands-on knowledge of a wide variety of conveyancing challenges and solutions. After helping in excess of 50,000 clients in his career, he uses all this experience within his article writing for SAM, mainstream media and his self published book How to Buy a House Without Killing Anyone.

Reviewed by: Caragh Bailey

Caragh is an excellent writer and copy editor of books, news articles and editorials. She has written extensively for SAM for a variety of conveyancing, survey, property law and mortgage-related articles.

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