Legally speaking, living with someone you’re not married to differs from living with someone you are married to.
So, it requires it’s own type of agreement: a cohabitation agreement.
This covers both parties in the event of a breakup.
We’ve explained everything you need to know about this type of agreement in the blog below.
What is a cohabitation agreement?
A cohabitation agreement is a written agreement between two people living together but not married.
The purpose of this agreement is to clarify critical details about the property. This includes:
- Ownership percentages
- Who pays bills, rent, and other financial responsibilities
- Details about joint bank accounts
- What happens to a pet if the pair separate
- Info about pensions, life insurance, savings, and investments.
Clarifying these issues should ensure that separating couples avoid ending up in court to settle property-related problems.
Who are cohabitation agreements used for?
They are generally designed for unmarried couples.
However, they can sometimes be used by family members or friends, too.
When are cohabitation agreements made?
Cohabitation agreements are usually created before people move in together.
However, changes can be made further down the line if both parties agree.
Why is a cohabitation agreement useful?
Protecting rights
Firstly, it protects the rights of both people involved.
When your agreement is well-written, it outlines what each party is entitled to. This ensures that you get everything back that you deserve.
Clarification of ownership
Misunderstandings are also far more likely without a written agreement.
Even if neither party has genuine malice, there can be confusion about who bought what and what each party can take away when you move out.
A cohabitation agreement helps track things that are difficult to value. Examples include driving children to school or cleaning the house. If only one person does this, you can reflect it in the settlement.
Insurance against unforeseen events
The agreement gives all parties protection in case the other passes away.
You may not be entitled to any of their finances or belongings without a written contract.
But a well-written cohabitation agreement can change that.
How much does a cohabitation agreement cost?
You’ll need to get the support of a solicitor to create a cohabitation agreement, which costs around £750 on average.
You might pay thousands if it’s a complex contract. But if it’s basic, you could find some solicitors that charge even less than this.
Do I need a solicitor to create a cohabitation agreement?
You should get the support of a solicitor, unless you’ve got legal experience and have created this type of agreement before.
Your solicitor can ensure that the document is binding. They will also consider eventualities that might not cross your mind.
They can make sure the agreement is fair to all parties.
Your solicitor should have professional indemnity insurance to cover anything going wrong. They’ll also be able to guide you both when the agreement ends.
Costly mistakes can occur without professional guidance.
Only a qualified solicitor with experience in this area should consider attempting it themselves. And even then, an outside eye can be helpful.
How to end a cohabitation agreement
The process is straightforward if both parties agree to end a cohabitation agreement.
You need to put it in writing and then witness a ‘deed of termination’. A solicitor can help you with this.
A few other scenarios that should trigger the termination of a cohabitation agreement include:
- One of the parties dying
- One of the parties getting married
- The parties adopt or have a child
- A court order that forces you to end the agreement.
If you want to end the agreement but the other party doesn’t, a solicitor can help you.
Disagreements about money, housing or children can often end up in court in this situation.
Can you get a cohabitation agreement if you’re married?
If you’ve already got a cohabitation agreement, it becomes invalid once one of the parties marries – even if you marry each other.
A pre-nuptial agreement is a suitable replacement document if you marry each other. This serves a purpose similar to a cohabitation agreement but for married couples.
Alternatives to a cohabitation agreement
Cohabitation agreements are ideal for unmarried couples. If you get married, a pre-nuptial agreement should take its place.
There isn’t a suitable alternative to a cohabitation agreement when unmarried.
If someone passes away, the only real alternative to a cohabitation agreement is creating a will.
This can explain what happens to your finances and assets if you die.
If both parties do this, you can ensure you leave all your things to each other. But inheritance tax will still be due.
