Laura Jones, Trainee Solicitor in the Family Department at Rowlinsons Solicitors discusses the misconception surrounding the rights of cohabiting couples and how cohabitation agreements can be utilised.
It is becoming increasingly common for couples to live together prior to marriage, with some deciding not to marry. There is a misconception that if you live together for a certain number of years that you have a “common law marriage” granting you similar rights to that of married couples, however, this is simply not the case. Whilst married couples have claims against each other for pension, income and capital, if you are an unmarried couple, then your claims against each other are limited to property ownership claims under the Trust of Land and Appointment of Trustees Act (1996), limited Inheritance Act claims and Schedule 1 of the Children Act 1989 claims, if applicable. It is for this reason that cohabitation agreements are becoming more popular and are always advisable to ensure that assets are properly protected from the outset.
A cohabitation agreement is essentially a family law contract entered into by parties who are living together in order to set out the terms of the cohabitation together with how matters ought to be dealt with, should that cohabitation come to an end. A cohabitation agreement can include details in relation to the ownership of the property, payment of the mortgage and household bills and any other assets that may need to be dealt with.
In the event of a dispute, cohabitation agreements are not 100% binding as we are unable to prevent a Court making orders should an application be made to vary the terms. However, such an agreement can be used as evidence of the parties’ intentions at the time of cohabiting, and the Court would be asked to consider upholding the agreement if certain conditions have been met. It is usually a requirement that the parties to a cohabitation agreement provide full and frank disclosure of their financial means, so each party can make an informed decision about whether the agreement is fair and reasonable. Each party would need to seek independent legal advice on the terms of the agreement before entering into it. Further, the agreement itself should be fair and reasonable, in writing, and contain the necessary requirements for it to be considered by a Court. Whilst a cohabitation agreement can be entered into at any time, it is always advisable for the parties to do so prior to cohabitation, so that the intentions and agreements are clear from the outset.
Cohabitation agreements are even more crucial should you look to cohabit with someone in a property that is owned in their sole name legally. If you are not named as a legal owner of the property and the relationship were to breakdown, you would not automatically be entitled to a proportion of the equity in the property regardless of how long you may have lived there. Instead, you would have to rely on trusts laws in order to show that you have acquired a beneficial interest in the property. This is a very complex area of law and there is no guarantee of success when arguing any such beneficial interest in a property. If there was a cohabitation agreement in place, then this would be used as evidence as to your interest in the property and therefore increases your chances of recovering any contributions made during the cohabitation period.
Cohabitation agreements are becoming more common and ought to be considered by anyone who is unmarried and contemplating buying a property with another person or moving into someone else’s property. If you require any assistance in relation to cohabitation agreements, then please do not hesitate to contact us on 01928 735 333 and we would be more than happy to assist.