Associate Solicitor Jane Chandler answers the most frequently asked questions about cohabitation agreements, including their strengths and weaknesses
What is a cohabitation agreement?
A cohabitation agreement is a record of an agreement reached setting out the rights and responsibilities in relation to the property where two or more people live together or intend to live together, setting out the financial arrangements both during and after cohabitation.
What can be included in a cohabitation agreement?
The agreement can record the beneficial interest each party has in the property as well as setting out the ownership of personal property such as furniture, antiques and art which the cohabitees can enjoy the use of while cohabiting but return to the owner should cohabitation end.
When should a cohabitation agreement be drawn up?
A cohabitation agreement can be drawn up before the parties move in together or whilst they are living together. The agreement may be entered into by couples who have chosen not to marry or by those who have chosen to pool their resources and purchase a property to live in together.
What are the advantages of a cohabitation agreement?
- A properly drawn up agreement can save costly legal fees should the cohabitation come to an end.
- As the agreement records each party’s legal and beneficial interest in the property in reduces the possibility of a dispute about ownership.
- The agreement can also detail what is to happen to the property, whether it is to be sold or whether one party is to remain in the property.
- It reduces the likelihood of disputes over ownership of personal property used jointly during the cohabitation.
- It can provide comfort to parents if they have provided funds to purchase the property.
What are the disadvantages of a cohabitation agreement?
- There is no certainty that cohabitation agreements will be upheld and enforced by the Courts.
- The agreement should deal with property matters only and any attempt to include matters such as sexual relations within the agreement would not be upheld by the Courts.
- Cohabitation agreements are governed by the law of contract and therefore there should be none of the vitiating factors such as fraud, duress, undue influence, misrepresentation, mistake or illegality in relation to the agreement.
Cohabitation agreements and declarations of trust
A declaration of trust will record the parties’ respective beneficial interests in the property and will hold more weight should matters become contested.
A cohabitation agreement goes further in that it will record how the mortgage and other household expenses are to be paid, what should happen if a co-owner wants to sell the property, the arrangements should one party wish to buy the other person’s interest in the property, ownership of joint and separate personal property, the financial support between cohabitees should the relationship end and the living arrangements and financial provision for children should cohabitation end.
Jane Chandler is an Associate Solicitor based in our Solihull office. If you'd like to know more about cohabitation agreements, please contact Sam Kent (0121 289 3599 or s.kent@qsdavisons.com) or Jane Chandler (0121 685 8126 or j.chandler@qsdavisons.com).