What is a Cohabitation Agreement?

When two people decide to live together, as a couple or otherwise, then a cohabitation agreement records the arrangements made between those two people. It records the couple’s rights and responsibilities in relation to their property (where they live or intend to live), there finances, (during and following the cohabitation) and importantly the arrangements to be made if they no longer wish to live their lives together.

What is the Benefit of a Cohabitation Agreement?

By having this formal document, it can avoid the costs of litigation, particularly where property is co-owned by two or more cohabitants. When drafting the document, it is important to consider other items including cars, furniture, art and other goods which may normally be used and enjoyed by the cohabitants when they lived together but are specifically to be retained by one of the cohabitants if the cohabitation ends.

A properly drafted cohabitation agreement records legal and beneficial interest in property, finances and the other items mentioned above. This reduces, if not eradicates, the risk of a dispute about ownership when cohabitation comes to an end.

Is the Agreement Unromantic?

Apparently, it is, however the benefits far outweigh the issue of romance. By having the document put in place at a time when things are good and there is less stress and acrimony between the cohabitants, can save a lot of headache and stress in the future when things aren’t going so well.

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.

I am usually instructed by couples that do not wish to marry or enter into a civil partnership but have decide to live together. The property can either be rented, owned solely by one, owned by one or more, or with a third-party. Sometimes the property is owned in equal shares and on other occasions in specific percentages. When drafting the cohabitation agreement, I take extra care to ensure the parties respective interests are reflected.

Where do I Start?

The simplest place to start is to get the cohabitants together and agree who owns what, in what shares and how those assets should be divided in the event of a parting of ways. It is important to understand what the cohabitants want from their agreement. One of the cohabitants will then pay to have the agreement properly drawn up and a copy sent to the other cohabitants, who should have their own independent legal representation. Once all the parties are satisfied with the agreement then it can be signed and witnessed. There are specific requirements for executing a cohabitation agreement and legal advice should always be sought.

Is the Agreement Legally Binding?

Cohabitation agreements are legally binding when they are drafted properly, executed in the required form, and where all the parties have independent legal advice. It, and you, will then have the full legal protection. By having independent legal representation, it removes the possibility of there being duress, for example when one side says that the other, “made them sign it”.

What will it cost?

Properly drafted cohabitation agreements can be very complex if your affairs are complicated. The average amount of hours spent by your solicitor drafting a cohabitation agreement is 15 hours. This includes the initial meeting, preparing the document, making amendments pursuant to client instructions and then finally executing the document (signing it). The cost therefore 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 it is quite an expensive document to draft and enter into. When you consider the cost of not having a cohabitation agreement and entering litigation to sort things out in court, which can run into tens of thousands of pounds, then it is a sensible investment which gives certainty, stress-free and cost-effective reassurance. Often clients have told me that they sleep much better at night knowing that they have the agreement in-place giving stability and certainty to the relationship parameters.

Can I do Anything else to Protect Myself Legally?

My 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, and nowhere in England and Wales are cohabiting partners recognised. If you are not married and not in a civil partnership, then making a will ensures that your partner inherits if you die.

One of our Family Law Solicitors working on a Cohabitation Agreement

Why 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 and ensure the agreement is properly produced. Please don’t hesitate to visit our Cohabitation page or contact one of our solicitors directly on 01273 726951.