Cohabitation Agreements

A cohabitation agreement is a formal agreement entered into by two people who intend to live together as an unmarried couple, or a couple not in a civil partnership.

Its purpose is to set out what happens during the relationship and also in the event of the relationship breaking down.

This could be relevant if a partner is going to move into a property that you own in your sole name. Or if a couple are going to purchase a property together.

The agreement can cover issues including:

• who will own the equity in the property, and in what shares
• who will pay which bills
• who will contribute to the mortgage and in what amounts
• contributions to home improvements
• who will own items that you purchase for the house
• what will happen with the property if the relationship breaks down
• what will happen to the contents if the relationship breaks down
• how will joint gifts be dealt with
• what will happen with pets if the relationship beaks down
• financial support for both parties and any children if the relationship breaks down.

An agreement can be particularly important if you have not contributed / are not going to contribute equally to the property; both in terms of its purchase (the deposit and other purchase costs), the monthly mortgage payments and any significant capital improvements that may increase the property’s value e.g. a new kitchen, a loft conversion or an extension.

Such an agreement can also be particularly important if family members have assisted with the purchase price. Who is going to be entitled to that money if the relationship beaks down? Was it a loan or a gift? Was it to one person only or both?

The very act of discussing a cohabitation agreement can be very useful to make sure that you both have a clear understanding of what the expectations are going to be. It can be a prompt to think about and discuss issues that may seem unimportant at the exciting time of moving in or buying your first home together. But early misunderstandings can cause problems down the line. Thinking about all these issues and discussing them in advance should reduce the likelihood of misunderstandings or disagreements that could cause tensions later in the relationship.

A cohabitation agreement can also importantly avoid expensive and acrimonious court proceedings later on in the relationship if it does unfortunately break down. A relatively small amount of expense at this early stage, can avoid hefty legal fees in the future.

It may be tempting to write an informal agreement yourself and then may be better than having nothing in writing at all. However, agreements that are not properly drafted can sometimes be just as problematic than not having one at all. It may not be sufficiently clear, or cover all the relevant issues. If an agreement is not properly worded, a court may decide that it should not be upheld.

Certainly, if the agreement is going to cover how the equity in the property is going to be owned and you want to own it in unequal shares, this must be drafted formally otherwise it will not be legally binding. This is called a declaration of trust and can be incorporated within a formal cohabitation agreement.

Our solicitors also have considerable experience to help you think through different options and scenarios and may well help you come up with issues or solutions that you may not have thought of yourselves.

If you would like further information or advice about cohabitation agreements please contact our Cohabitation agreement solicitors via email at enquires@alettashaw.co.uk or by calling 020 8301 4884 .