What Is a Cohabitation Agreement?

More couples than ever before are choosing to live together without getting married. They often go on to settle down, buy a home and start a family without exchanging marital vows.

Although their cohabitation may be no different from that of a husband and wife, their legal rights are markedly different when it comes to splitting up.

A cohabitation agreement can go some way to offsetting the absence of rights afforded by marriage and prevent lengthy disputes over assets and finances when separating.

In this article, we’ll explore everything you should know before considering entering into a living together agreement.

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    The most recent ONS figures show that nearly 9 in 10 (88%) of opposite-sex couples cohabited before getting married. Marriage rates are at their lowest level in 40 years with fewer people choosing to tie the knot.

    This has led to millions of couples cohabiting together without any legal rights to property or finances upon separation.

    A Cohabitation Agreement (Or ‘Living Together Agreement’ as it is sometimes called) is a legal document that records how things will be owned and shared between an unmarried couple should the relationship end.

    The agreement will generally list the individual assets that belong to each party, as well as any shared assets and debts.

    Crucially, it will also specify the intentions of how assets should be divided upon separation. This could involve rights to property, joint savings accounts, access to children, etc.

    Many people think of a cohabitation agreement as an admission that the relationship will end. However, if you view it as an insurance policy like building insurance, it’s a sensible and pragmatic measure in case the worst happens.

    The primary purpose of a cohabitation agreement is to prevent costly and lengthy disputes from arising following a separation.

    Dealing with important issues immediately following a breakup can lead to hasty and emotional decisions being made. This can be prevented by agreeing on what should happen to specific things now.

    Are Cohabitation Agreements legally binding in the UK?

    Strictly speaking, cohabitation agreements are not legally binding (in England and Wales) in the sense that courts must uphold them, however, similarly to prenuptial agreements, the courts will consider them as part of any application.

    Many people at this point will think “Is it even worth doing?”, but rest assured, if the agreement is drafted correctly by family law solicitors then it will be legally ‘enforceable’.

    There are a couple of key things you need to do to ensure the agreement you have drafted is legally enforceable, which we cover in more detail below.

    When a couple can come to an agreement between themselves that is fair, reasonable, and open, then Judges don’t tend to want to intervene unless they see fit.

    Do unmarried couples have the same rights as married couples?

    In England and Wales, there is no such thing as ‘common law marriage’, despite the belief of many to the contrary.

    This means that even though you may live a very similar life to a married couple, the rights you have in regards to assets and finances upon separation are very different.

    Even if an unmarried couple lives together for many years and has children, they will not acquire any of the legal rights afforded to their married counterparts.

    Unlike divorce where both parties are legally entitled to claim a share of all matrimonial assets, irrespective of who bought what, non-married couples who go through a breakup cannot claim anything which belongs to the other party.

    Unmarried couples have limited rights for example:

    • Making claims on your partner’s property even with financial contributions.
    • Rights to financial support for any children of the relationship
    • Claims to assets on the death of your partner
    • No tax reliefs on lump-sums or pensions for example.

    NB: The Cohabitation Rights Bill is currently making its way through Parliament. If this becomes law, it could change the situation regarding the legal rights of cohabitees.

    What are the benefits of getting a cohabitation agreement?

    The primary reason for obtaining a cohabitation agreement is to provide clarity to both parties over what the future arrangements look like for owned and shared assets or responsibilities, e.g. household bills, property, maintenance, etc.

    Here are some of the other key benefits:

    • It prevents future arguments – By making an agreement now, it can stop people from making emotional or irrational decisions immediately after a breakup.
    • It gives both parties clarity if the worst happens – who owns the house, who pays what bills etc.
    • It can help reduce the chances of couples resenting each other should the worst happen and you break up.

    What can be included within a cohabitation agreement?

    There is a range of issues that can be specified in a cohabitation agreement, mainly involving financial affairs. Some of the points can include:

    • Who owns which assets – and what are the shared assets (if any)
    • How should any assets be divided in the event of a breakup
    • How should expenses be shared whilst cohabiting
    • Who is responsible for any household debts
    • Who will pay the household bills upon separation
    • Outlining the financial responsibilities of each party regarding any children
    • How should the shared home be dealt with if the couple separates (eg should the house be put up for sale and the proceeds divided)

    Cohabitation agreements can also include provisions regarding what should happen to certain assets in the event of the death of either party.

    However, the best way to specify any intentions regarding the distribution of assets following one’s death is best dealt with by drawing up a will.

    Once the agreement is in place, it should be reviewed at regular intervals, especially if there have been any significant life events such as the birth of a child.

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    When you may wish to consider getting a cohabitation agreement

    There are various reasons why you may be considering an agreement of this nature, but here are some of the most common scenarios:

    • You’re moving in together for the first time – It can clearly lay out what the rights are for both parties in regards to property ownership.
    • One party has no intention to get married – You may wish for some legal protection if you never plan to get married.
    • One party already owns a property – If you want clarity on what is to happen with it if you have moved in or are going to be moving in.
    • If there is a clear disparity in wealth- If you want to document who owns what or how assets will be divided if you break up.

    Requirements to make the agreement enforceable

    There are various conditions that must be met to make a cohabitation legally enforceable, namely:

    • Both parties need to enter into the agreement freely and voluntarily.
    • The agreement must be set out in the form of a deed and signed by each party in the presence of witnesses.
    • Each party should receive independent legal advice on the agreement.

    Can you write your own agreement?

    Technically, yes, but in reality no.

    You can write your own agreement by all means, but it won’t have the same legal standing as an agreement drafted by family law solicitors.

    So if you went to enact the agreement upon separation, it’s unlikely to be upheld by a Judge.

    Within your agreement, you may need specific legal clauses drafted in regards to property ownership, access to children, or the separation of joint savings accounts or personal belongings.

    These types of legal clauses will not be included within a free template on Google.

    This is why it’s imperative to receive legal advice on the implications of signing the agreement.

    What is the difference between a cohabitation agreement and a prenuptial agreement?

    A cohabitation agreement is suitable for couples who live together (or are soon to be living together) and there is no intention of getting married or entering into a civil partnership in the near future.

    Couples planning to get married or enter into a civil partnership soon should consider a prenuptial agreement as it’s a pre-marital agreement.

    The agreement can go some way to protect assets that are owned prior to the marriage or civil partnership. A prenup should be entered into freely before the marriage date, so acting well in advance is recommended.

    Why do you need a cohabitation agreement?

    The law in the UK currently does not afford any financial protection to people cohabiting unless they are married.

    If a non-marital relationship breaks down, this can leave one party completely destitute if they have no assets of their own.

    A cohabitation agreement can go some way to providing cohabiting couples with some form of legal cover in the event that they split up.

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