What is a cohabitation agreement?
When two people decide to live together, a cohabitation agreement records the arrangements between the two. It records the couple’s rights and responsibilities for:
- Their property (where they live or intend to live)
- Their finances, (during and following the cohabitation)
- The arrangements made if they no longer wish to live their lives together.
In essence, it is a legally binding contract between the two parties.
What is the benefit of a cohabitation agreement?
By having this formal document, you can avoid litigation costs. This helps particularly where the property is co-owned by two or more cohabitants.
When drafting the document, it is important to consider all other items of value. This includes cars, furniture, art and other goods which both parties may have used. When the cohabitation ends, the agreement states who retains these items.
A proper cohabitation agreement records legal and beneficial interests in property and finances. This reduces the risk of a dispute about ownership when cohabitation comes to an end.
Is the agreement unromantic?
According to some, it may be. However, the benefits far outweigh the issue of romance. It is advisable to fill out the agreement when times are good and amicable. This can save a lot of headache and stress in the future when things may turn sour.
Who can enter into a cohabitation agreement?
The usual parties to a cohabitation agreement are couples. However, it is not unusual for anybody cohabiting in a property to enter into this type of agreement. Usually, this applies to couples that want to live together but don’t want to get married.
In these scenarios, they either rent or own the property, whether the latter be solely or dually. When drafting a cohabitation agreement, the document should reflect the interests of both parties.
Where do I start?
The simplest place to start is to get the cohabitants together and agree on who owns what. This way, you’ll know how the dividing of assets and shares will pan out. It is important to understand what the cohabitants want from their agreement.
One of the cohabitants will then pay to have the agreement drawn up and a copy sent to the other cohabitants. They should all have their own independent legal representation. Once all the parties agree with the agreement, it can then be signed off and witnessed.
Remember: there are specific requirements for executing a cohabitation agreement. Legal advice should always be sought.
Is this agreement legally binding?
Cohabitation agreements are legally binding. However, this is true only if the agreement is:
- Drafted properly
- Executed in the required form
- All parties have independent legal advice
If your agreement meets these criteria, then you will have full legal protection. By having independent legal representation, it removes the possibility of duress. For example, if one side claims that the other ‘made them sign it.’ Legal representation could not act for both sides here as it would be a conflict of interest.
What will it cost?
Properly drafted cohabitation agreements can become quite complicated. The average amount of hours spent by a solicitor drafting an agreement is 15 hours. This includes:
- The initial meeting
- Preparation of the document
- Making amendments pursuant to client instructions
- Executing and signing of the document
Britton and Time’s charge for a cohabitation agreement starts from £1,800 + VAT. Price increases depend entirely on the complexity of the matter at hand. However, on average, a cohabitation agreement usually falls between £3,000 plus VAT and £4,500 plus VAT.
For independent legal advice on the agreement given to the other parties, you should budget between £300 and £500 plus VAT for their legal fees.
Clients often feel that a cohabitation agreement is quite expensive to draft. When you consider the cost of the document, think of the alternatives. Would you rather enter into litigation proceedings in court? This can easily run into tens of thousands of pounds. Compared to this, an agreement is a sensible investment that gives financial reassurance.
Can I do anything else to protect myself legally?
Our first suggestion would be to make wills. We, as a firm, charge £400 plus VAT for a basic will. If you die intestate, meaning without leaving a will, then there are rules in place about who gets what. Nowhere in England or Wales recognises cohabitation partners under these rules. If you are not married or in a civil partnership, making a will ensures that your partner inherits if you die.
Why should you contact our family law solicitors about a cohabitation agreement?
Cohabitation agreements can be a puzzling and sensitive topic. Therefore, you need an experienced solicitor to provide trusted guidance. This is to ensure the agreement is properly drafted and produced. For further enquiries, please visit our cohabitation page or contact us on 020 3007 5500.