What is a Cohabitation Agreement?
Estimated reading time 5 minutes
Buying a property can be a challenge. We’ve all seen the stories about how difficult it is step onto the property ladder – some wait until they are married, giving themselves longer to save. Others have been saving for years and wish to take the plunge before marriage.
Moving in as a couple is a big commitment, which is why many seek out a cohabitation agreement. Living together unmarried doesn’t give you the same rights as if you were married, so it is only right that you have some form of protection should an unfortunate separation occur further down the line.
A cohabitation agreement, sometimes called a living together agreement, ensures both you and your partner are legally protected in the event of a separation. It helps establish the ownership of shared assets and clarifies where financial responsibilities lie.
Is a cohabitation agreement legally binding?
Yes. Perhaps thankfully, a cohabitation agreement is legally binding. However, this doesn’t mean you can simply draw one up and expect a court to enforce it. You’ll need to ensure that both you and your partner have been fully transparent about your finances, have sought appropriate legal advice, and completed the document correctly.
In addition, the agreement must:
- Be signed by both parties
- Be kept up to date, should anything require changing
- Be entered into with consent
- Be structured in the form of a deed
Why do I need a cohabitation agreement? We aren’t going to separate!
According to Psychology Today, unmarried couples living together see approximately 50% of relationships falter. As a result, it’s best to safeguard yourselves even if you don’t foresee a separation.
Having a cohabitation agreement in place before you move in together gives you added peace of mind about how things may be shared, and provides a clearer understanding of your financial commitments. You’ll both have an easy-to-understand document that outlines your rights and responsibilities once you’re under the same roof – and how things will be divided if you separate.
Can I draw up a cohabitation agreement after we’ve moved in together?
Yes, you can draw it up before you move in, or even several years after you’ve been living together. In most cases, couples decide to proceed with a cohabitation agreement before they share a property, but there’s nothing wrong with doing it at any stage.
Just remember: over time, circumstances change. So no matter when you draw up the agreement, you may need to review it from time to time to ensure it still reflects your current situation.
What should be included in a cohabitation agreement?
A cohabitation agreement can be extremely detailed, although it doesn’t have to be. Its main purpose is to help establish who owns what, how bills will be covered, and how responsibilities relating to the property are managed. You might include:
- Bills – Who pays them, what the splits may be for the mortgage, and how they’ll be covered if the relationship ends
- Property (single ownership) – If one party owns the property, the agreement can ensure it cannot be claimed by the non-owning party in the event of a split. It can also prevent them from gaining beneficial interest or claiming income if the property is rented out
- Property (joint ownership) – If you both own the home, the agreement should record this and state what each party is entitled to if you separate
- Assets – Items such as cars, electronics and furniture should also be listed, indicating who owns what and who gets what in the event of a separation
How much does a cohabitation agreement cost?
The cost can vary, but you could expect to pay between £300 and £400 for a cohabitation agreement. Much depends on your specific circumstances and the solicitor’s fees. Many solicitors offer a free estimate, so it’s worth shopping around to get a clearer idea of costs.
While it may sound like a high expense initially, it pales in comparison to the potential legal costs if you don’t have an agreement in place and need to resolve issues through the courts.
Do I need a solicitor, or can I write my own cohabitation agreement?
You can write your own cohabitation agreement using one of the many templates available online. Just be aware that you’ll need to tailor it to your individual situation. As mentioned earlier, the agreement can be updated at any time to reflect changes in your life, so it’s worth reviewing it periodically.
That said, it might be advisable to hire a solicitor. You’ll both need to seek independent legal advice to ensure the agreement will be upheld in court, so having a solicitor involved from the start could save time and help avoid complications. A solicitor can also assess your property, finances, and asset distribution to ensure your interests are properly protected.
In most cases, your solicitor will suggest that each of you gets advice from separate solicitors before the agreement is signed. This helps ensure that both parties are fairly represented.
Separations are never pleasant – they can be a painful experience for both parties. Sometimes, to close the chapter once and for all, the property may need to be sold – ideally, as quickly as possible.
That’s where we come in. We are experts at securing a quick house sale, completing the process in just seven days. With a speedy valuation and a rapid offer, you can say goodbye to slow sales processes.
Give our team a call today to start the process – and move on with your life tomorrow.
