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Toby YerburghPartner - Head of Family Law
A cohabitation agreement is a legal document that unmarried couples can use to protect their rights if they separate. It can cover things like who will live in the family home, how assets will be divided and who will be responsible for any debts. Cohabiting couples have fewer rights than married or civil partners. Signing a cohabitation agreement ensures that you’re both treated fairly if your relationship breaks down.
What is a cohabitation agreement?
If you are planning to live with your partner, or already do so, you can enter into a cohabitation agreement. This document records:
- Who owns what and in what proportion
- What your financial responsibilities towards each other will be, and
- How assets you own together will be divided should you later split up.
Unmarried heterosexual and same-sex couples, and those not in a civil partnership, can make a cohabitation agreement. Provided they are properly drafted, cohabitation agreements are legally binding in the UK.
What can a cohabitation agreement cover?
The cohabitation agreement can cover any financial aspect of living together, including:
- Who owns property
- Who will pay the mortgage or rent
- How you will divide up and pay for household expenses
- Who owns bank accounts, money and assets such as cars
- How pensions will be divided
- Who will pay debts
What should be included in a cohabitation agreement?
Since each couple is different, the cohabitation agreement will be tailored to fit your situation. Most agreements are comprehensive and deal with day-to-day matters such as the payment of bills as well as what happens to your home if you decide to go your separate ways.
Most couples will need to consider at least the following:
Property owned before the relationship — whether the property will be kept separate or whether the non-owning partner will have a claim on it if you separate.
Property bought while living together — if you bought a property together, a cohabitation agreement can confirm who owns what percentage of the home, and set out any agreement in respect of chattels. It can also specify what will happen to the property when you separate. For example, will one of you have the right to buy the other out or will the home be sold?
Everyday expenses— who will pay the bills and in what proportion? By law, someone who does not own property but makes a contribution towards it, for example by paying the mortgage or funding renovations, may be able to claim a share of the property. The cohabitation agreement will need to take this into account.
What rights do I have with a cohabitation agreement?
The purpose of a cohabitation agreement is to avoid expensive litigation. The court will enforce it as long as:
- It is executed as a deed
- You both obtained separate legal advice before signing the agreement, and
- You were honest about your finances
A well-drafted cohabitation agreement provides reassurance that you have recorded all the rights and responsibilities you agreed with your partner should you eventually break up.
It’s a good idea to review your cohabitation agreement every few years and keep it updated as your relationship changes. Many couples will modify their agreement when a key trigger event occurs, such as the birth of children or one of you becoming seriously ill.
Do cohabiting couples have the same rights as married or civil partners?
When a married couple divorces or dissolves a civil partnership, both partners have a legal right to a fair share of the couple’s assets. Cohabiting couples have none of these rights, since no laws exist to protect the rights of unmarried couples in any meaningful way. This does not change if you buy a house or have children together, save that you can rely on Schedule 1 of the Children Act 1989 in certain circumstances.
By entering into a cohabitation agreement, you ensure that you:
- Know what your rights and responsibilities are to each other
- Have rights over your partner’s property in the event of their death
- Protect the economically weaker partner, such as a parent who has given up their career to care for the children
- Make use of tax reliefs or exemptions that otherwise may not be available
- Avoid lengthy and costly court proceedings in the event of disagreement
- Have clear evidence of your intentions if you have to go to court
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