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Cohabitation agreements

View profile for Lauren Kelly
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In this article Lauren Kelly, solicitor with Chattertons Solicitors, looks at why living together rather than marrying raises particular legal issues, and why a properly drafted agreement is vital to protect the interests of people in a cohabiting relationship.

Many people will be aware that the cohabiting relationship is the fastest growing family type in the UK, with more and more people delaying plans to marry or shunning the idea altogether. The number of people in a cohabiting relationship increased exponentially by 60% between 1996 and 2006 alone, and this number may be set to rise even further as couples of all ages decide not to walk down the aisle.

Many people do not realise the legal implications of being in a cohabiting relationship and how their status as a cohabitee is very different to that of a spouse. There seems to be a common misconception that cohabitees enjoy the rights of a “common law spouse” and that they can rely on these rights in the event that their relationship breaks down. As many separating couples find to their detriment, this is simply not the case, regardless of the length of relationship. Cohabitees do not have special protections in the eyes of the law and as such there can be a great deal of uncertainty when these relationships do break down, with partners wondering what they may be able to salvage from a relationship in which they have invested financially as well as emotionally.

Common problems for cohabitees to encounter on separation relate to owned property. In cases where a couple own property jointly, there can be disagreements as to whether the property should be sold/how the equity in the property will be split. If the couple cannot agree they may need to apply to the Courts to intervene and determine the issue for them. Alternatively, if the couple lived in a property owned by only one of them, the non-owning partner will be unable to claim a legal interest in the home, even if they contributed to renovations costs and/or mortgage repayments. In these cases, the non-owning partner may need to turn to Court proceedings to try and fight for a share of the property. These proceedings can be extremely costly and stressful and should be avoided wherever possible.

A sensible solution, to avoid this uncertainty, and the additional distress on the breakdown of a relationship, is to consider putting in place a cohabitation agreement, a legal document which can record the couple’s entitlement over the assets of the relationship, both during the cohabitation and in the event of the couple’s separation. Cohabitation agreements can be used to determine how any property is to be owned, and in what shares. They can even record how the parties intend on paying the mortgage and utility payments whilst they are together. The ownership of other assets, such as cars, furniture and bank accounts, can also be included in the agreement and this can again limit disagreement should the relationship end.

In addition, cohabitation agreements can be very useful in establishing the financial provisions for any children of the family (ie payment of school fees) over and above the statutory entitlements under the Child Maintenance Service (or “CMS”). The benefit of the cohabitation agreement is that it has a far wider scope than the CMS, which has a very limited jurisdiction, being focused entirely on a formulaic calculation of the value of weekly maintenance payments.

Crucially, cohabitation agreements are legally binding so long as both parties receive independent legal advice.  This means that two sets of solicitors need to be instructed. In order to advise their clients properly on the fairness of any proposed cohabitation agreement, solicitors should be insisting that the parties fully disclose their financial position. Once the parties are aware of what the other owns, a watertight agreement can be drafted by one set of solicitors, with the other approving or suggesting amendments as necessary. Cohabitation agreements will vary in cost depending on their complexity, but will be far less expensive than instituting legal proceedings after separation. They will also, of course, buy peace of mind.

Chattertons have specialist family lawyers who are able to advise on this ever more important area of law and will offer a fixed fee first appointment so that you can discuss what is best for you with a qualified professional.  If you have concerns about your status as a cohabitee, and would like further advice and information, please contact your local Chattertons office and book in an appointment.

If you would like any further advice regarding this, or any other, family law issue please contact a member of our specialist Family Law Team.

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