“There has been a complete revolution in society’s attitude to unmarried partnerships of the kind under consideration. Such unions are far commoner than they used to be. The social stigma that once attached to them has almost, if not entirely, disappeared.” (Bridge LJ Dyson Holdings Ltd v Fox 1975)
Despite this view being stated 40 years ago, the position remains that cohabitants do not have the same legal rights as married couples or civil partners, especially in relation to property claims and financial maintenance. There is no such thing as a common law wife/husband, despite this remaining a popular belief.
What Is a Cohabitation Agreement?
A cohabitation agreement serves the purpose of setting out agreed terms between parties who live together but are not married or in a civil partnership, providing clarity regarding their financial and property arrangements both during the relationship and in the event of its breakdown.
There is little judicial or legislative guidance on such agreements, but common sense would suggest that the guidelines as set out in relation to pre-nuptial agreements should equally apply when drawing up a cohabitation agreement. Both parties should receive independent legal advice and understand the potential effects of the agreement fully. There should be an exchange of full and frank financial disclosure. The agreement should be reviewed on the birth of a child or any other significant change in the parties’ circumstances.
What Is Included in a Cohabitation Agreement?
The agreement can address a range of matters, including financial contributions, property ownership, and arrangements for children. It is a means of avoiding disputes by clearly documenting the parties’ intentions. It can specify how jointly owned property will be divided or what happens to individual property upon separation, as well as the provision of financial support for children.
Provision may be made for the payment of day-to-day outgoings, including responsibility for payment of specified items and what share of outgoings each party is to pay. Provision for the payment by one cohabitant to the other during the relationship is unlikely to be enforced, but such a provision can be included in the interest of clarity for the parties.
Provision for maintenance to a former cohabitant (not for a child) may also be included, but again is unlikely to be enforceable because the courts will consider such a provision void as against public policy. Provision for children is much more certain. A maintenance agreement can be made, although it would not stop either partner from making an application to the Child Maintenance Service.
It is sensible to also have a Declaration of Trust allowing the parties’ interest in a property to be reflected in the documents of title, as well as in a cohabitation agreement to ensure clarity and enforceability. This is particularly important as disputes over property interest are often resolved based on the legal title and any express declarations of trust. Also, the courts place significant weight on the intentions of the parties as recorded in formal documents.
A declaration of trust is particularly useful where the property is jointly owned or where one party is the sole legal owner but the other has an equitable interest. It provides a clear and enforceable record of the parties’ respective shares. This reduces the risk of disputes and ensures the parties’ intentions are upheld.
Pensions should also be considered, for example, where the parties wish to agree nominations for death in service benefits. Consideration may also be given to whether the parties’ lives should be insured, with the other party as the beneficiary in the event of death, and as to the payment of the policy premiums.
Provisions within a cohabitation contract in relation to parental responsibility for a child and child arrangements will not strictly be enforced by the court. However, such an agreement may be of evidential value in any subsequent dispute between the parties. It is now, in any event, usually the case that both parties would have parental responsibility.
The agreed terms should always be reality checked against what a court would likely award if there was a dispute to ensure there is no significant injustice. All the circumstances of the case should be considered, including the relative bargaining positions of the parties and any pressure they may be under from the other party or any third parties.
Do You Need a Cohabitation Agreement?
If you are living with your partner or planning to move in together, a cohabitation agreement can give you peace of mind by providing clarity and protecting your interests. Our experienced Surrey Family Law team at Howell Jones can guide you through the process, ensuring the agreement reflects your wishes and circumstances.
To speak to one of our Surrey solicitors about putting a cohabitation agreement in place, please contact us on 0800 011 9813 or email hello@howell-jones.com.
