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A cohabitation agreement applies to a couple who are living (or intend to live together) and are not married or in a civil partnership/are not intending to get married or enter into a civil partnership. Where a couple are married or in a civil partnership a completely different legal framework applies.
A cohabitation agreement will regulate the terms upon which a cohabiting couple live together and addresses what happens should the relationship end. For example interests in property, financial support such as who pays what and for how long and so on.
A cohabitation agreement is likely to address the following:
For the purposes of this blog, where I’ve provided an example I am going to refer to the couple as Jack and Jill.
One person’s sole name
If Jill has purchased a property (which I shall call “The Hill”) in her sole name and she and Jack have agreed that Jack will not have any interest in it then this can be recorded in a cohabitation agreement.
This declaration that Jack will not have any interest in The Hill would then be conclusive in the future (subject to certain limited circumstances). One of the benefits to this is that it helps Jack and Jill to both understand the basis upon which The Hill is owned and, in itself, this can help to avoid a dispute in the future because they are both entering into the relationship with their eyes open.
It also offers Jill protection in the future. As will be obvious, the longer a relationship the more difficult it can be to ascertain what the intentions of the parties were and how they may have changed. Having a cohabitation agreement means that this intention is clearly recorded and therefore makes it very difficult for Jack to assert an interest in The Hill at a later date.
If Jack and Jill have already purchased a property together then they should have already considered and declared how they intend that property to be owned, which is either as:
However, if Jack and Jill have not declared how they wish to own the property then potentially this can be considered as part of the cohabitation agreement and/or as part of a separate declaration of trust. If it is to be part of separate declaration of trust (which in some circumstances may be preferable) then it is important to ensure that this is compatible with the cohabitation agreement.
This frequently addresses how a couple intend to meet the running costs associated with the property and any financial support that they will provide to each other whilst the relationship is ongoing.
One example of this may include Jack and Jill agreeing to open a joint bank account from which the direct debits will be paid and that they will each make a specified contribution to this account each month. If there is to be a joint bank account then a cohabitation agreement can also address whether there be an overdraft facility and whether both parties’ signatures should be needed to make withdrawals.
A cohabitation agreement should address what happens in the event the relationship breaks down.
This may include things such as:
If it is owned by one person (Jill) then how long is Jack able to continue living at the property before he is required to move out.
If it is owned by Jack and Jill jointly then what is to happen to it?
Should either of them have the opportunity to buy the other out?
Should it be sold and, if so, how should that sale take place?
The mechanics of this can be addressed as part of a cohabitation agreement.
For example, should they be closed or should they be transferred into one of the couples’ sole name?
A cohabitation can record contents and personal possessions that are intended to remain owned by one person and retained by them in the event of a relationship breakdown. A cohabitation agreement can also specify what is to happen in the event of jointly owned contents and personal possessions.
For example, should they be divided, should one person have the ability to buy the other person’s share or should they be sold at auction with the proceeds of sale then being split between the parties.
By way of example if a gift were made to Jack and Jill by Jill’s mother, should Jill retain that gift in the event of the breakdown of the relationship?
Whilst there is no obligation for an unmarried couple to provide financial support to each other in the event of a relationship breakdown (subject to any claims relating to children) it is possible, if agreed, to include for financial support to be provided as part of a cohabitation agreement. Such clauses are typically rare but it is possible for them to be included.
On some occasions couples want to include domestic arrangements dealing with household chores and arrangements. These types of arrangements should not be included as part of a cohabitation agreement and would generally not be enforceable in any event.
A cohabitation agreement helps to provide certainty. By entering into a cohabitation agreement both parties enter into the relationship with their eyes open and a clear structure can be provided for what the arrangements are intended to be during the relationship and what will take place in the event that the relationship breaks down.
For more information about cohabitation, or to arrange a confidential discussion about your personal circumstances, please do not hesitate to contact us.