CO-HABITATION & LIVING TOGETHER AGREEMENTS
Cohabitation agreements and living together agreements are needed in a number of different scenarios and not just when an unmarried couple buy a house together. They can be as short or as detailed as a couple require.
Who needs a cohabitation agreement or living together agreement?
Anyone who is unmarried and:-
- Owns a house with their partner or plans to buy a home jointly with their partner;
- Owns a house in their name but lives with a partner or intends to do so;
- Lives in a house owned by a family member or by a trust fund under an informal agreement or licence;
- Owns other property with an unmarried partner or allows their partner to use the property, for example a car or holiday lodge;
- Shares their finances with an unmarried partner, for example operates a joint bank account or has a joint loan or one partner has taken out a loan to pay for a family item.
What goes into cohabitation agreements and living together agreements?
The agreement can be as detailed or as brief as you want it but the agreement should be tailored to your circumstances. Often agreements will cover:-
- Who legally and who beneficially owns the house – the legal owner or owners can be different to the beneficial owners;
- What happens if one or both of you does work to the property or pays builders to improve it;
- Who pays the mortgage;
- Who pays the utility bills;
- If you operate a joint bank account how it is funded by both of you ;
- If you split up who will stay in the house;
- How , if relevant, the equity in the house will be independently calculated and split between you ;
- How you will sort out any debt or loans;
- How you will sort out the split of any joint bank accounts or other investments;
- How you will sort out the split of other items, for example a car that you may have both paid towards.
I own the house, so why do I need a cohabitation agreement or living together agreement?
If you legally own a house as your name is on the tile deeds to the property and on the mortgage a non-owning partner can make a financial claim over the property if you split up, even if their name isn’t on any of the legal paperwork. That is why it is important that there is a cohabitation agreement or living together agreement in place so you both know where you stand.
I am married now but before we got married we sorted out a cohabitation agreement. That is still effective, isn’t it?
The cohabitation agreement or living together agreement isn’t likely to be effective unless it was agreed that the document would be a ‘prenuptial agreement’ made in contemplation of your marriage. When a couple get married, spouses are able to bring wide ranging claims against assets owned by their spouse and the Court has a lot of discretion over what to award the spouse. The law is very different if you are making a claim over a property as an unmarried partner.
If you are married and have a cohabitation agreement or a living together agreement in place you could consider the option of entering into what is known as a postnuptial agreement – this is like a prenuptial agreement but signed after the marriage.
We don’t have a cohabitation agreement or living together agreement. Where do I stand with the house?
The answer depends on who legally and beneficially owns the house and a range of other factors. Even if you have owned a house jointly with a partner for some time you can still enter into a cohabitation agreement or living together agreement if you both want to do so. The agreement will protect both of your interests and formally record the agreement you have reached in order to minimise the risk of protracted and expensive Court proceedings if you split up.
We have a cohabitation agreement but circumstances have changed.
It is always sensible to review cohabitation agreements and living together agreements when major events occur, such as the decision to extend or renovate a property, one partner wanting to pay off a mortgage as a result of an inheritance or a gift from parents, the receipt of an advance from trustees, and a whole range of other reasons.
Evolve divorce and family solicitors can help with the preparation or the review of an existing cohabitation or living together agreement and guide you through your options.