Charlotte Beck (partner) and Amy Price (associate solicitor) in our Family Law team have written the below guide to help you understand the most important reasons why a cohabitation agreement might be right for you and your partner.
What is a cohabitation agreement?
A cohabitation agreement, also referred to as a cohabitation contract, is a contractual document entered into by a couple that live together but are not married or in a civil partnership.
The agreement may include terms regarding financial contributions, property ownership, and the ownership of important personal belongings.
It allows the couple to regulate the terms of their cohabitation, addressing matters such as financial arrangements, property rights, and responsibilities during the relationship, as well as provisions in the event of a relationship breakdown. Such agreements are particularly useful as cohabitants do not have the same legal rights as married couples or civil partners, especially in relation to property and financial claims.
Historically, cohabitation agreements were considered void on public policy grounds, but this is no longer the case. Courts now recognise the validity of such agreements, reflecting societal changes in attitudes towards unmarried couples.
How can a cohabitation agreement protect both partners?
A cohabitation agreement can protect both parties’ interests through providing clarity, fairness, and enforceability.
The agreement should be formally recorded in writing to avoid disputes and to comply with the Law of Property Act 1925, particularly if it includes declarations of property interests (which most cohabitation agreements will include).
It is also advisable to execute the agreement as a deed to ensure the right contractual formalities are in place.
Both parties should receive independent legal advice and enter into the agreement freely and voluntarily to avoid potential allegations of undue influence.
The process should be transparent, and, ideally, any variations to the agreement should be required to be in writing and also in the form of a deed. The variation clause is important to avoid one party later trying to claim that the original deed has been varied via oral discussions or asserted promises.
What is the difference between cohabitation and marriage in legal terms?
The most important legal differences between cohabitation and marriage in England and Wales lie in the areas of property rights, financial claims, and rights on death.
Firstly, cohabitants do not have the same property rights as married couples. Disputes between cohabitants regarding property are determined under the law of trusts, rather than family law. Cohabitants may need to establish a beneficial interest in property through ‘implied’ trusts, or proprietary estoppel, whereas married couples benefit from a statutory framework that provides much clearer entitlements. Significantly, even if one spouse has no legal or equitable interest in the home, he or she is still entitled to reside there as a result of the ‘home rights’ they have on account of the marriage itself. A notice can also be lodged with HM Land Registry to ensure any potential buyer is aware of the non-owning spouse’s home rights.
Secondly, the financial claims available to married couples are not available to cohabitants. Married couples can claim spousal maintenance, capital sums, and pension sharing orders upon divorce (pursuant to Part 2 of the Matrimonial Causes Act 1973), but cohabitants cannot.
Finally, cohabitants do not share the same rights as married couples on the death of a partner. For instance, cohabitants are not automatically entitled to inherit under intestacy rules, nor do they benefit from the same tax exemptions on transfers of assets upon death.
It is also very important to understand that there is no such thing as a ‘common law’ marriage; this is a myth.
Can I change or update my cohabitation agreement easily?
Yes, a cohabitation agreement can be changed or updated, but it is essential that any variation is properly documented. Cohabitation agreements are contracts, and, as such, they can be amended by mutual consent of the parties involved. It is good practice to record any changes in writing to avoid disputes and ensure clarity regarding the updated terms.
As above, the original cohabitation agreement should ideally contain a variation clause that requires any changes or updates to be made in the form of a deed.
Get In Touch
Charlotte Beck is Head of the Family Department. She specialises in children and divorce law, financial proceedings, international divorces and high net worth cases.
Amy Price is an Associate Solicitor in the Family team. She advises clients on matters relating to marriage, cohabitation and separation, to include nuptial agreements, divorce proceedings, financial settlements, child arrangements, cohabitation agreements, and property disputes.
If you think you might need a cohabitation agreement, or if you’re looking to understand more about your legal position, contact Charlotte, Amy or another of our expert cohabitation solicitors today on 0330 111 3131 or via our online enquiry form.
