Cohabitation Agreements Solicitors
There is a common misapprehension that if two parties are cohabiting they are “common law spouses” and have some entitlement to financial support from the other party upon separation. Unfortunately, this is simply incorrect; despite recommendations made by the Law Commission for reform in this area there is no current body of law which governs the division of assets when unmarried couples break up.
Nevertheless, couples who plan to live together, or who are living together, may choose to regulate their financial arrangements by entering into a formal agreement, usually called a Cohabitation Agreement which is enforceable at law. This type of agreement often deals with the ownership of a house, contributions towards bills and property maintenance, and crucially, what happens when the cohabitation comes to an end through the break- up of the relationship or death.
Is It a Binding Agreement?
For an agreement of this type to be binding it needs to be written in clear, unambiguous language, so that both parties know what their rights and responsibilities are. Both parties should disclose their assets, and if necessary they can be described in a schedule to the agreement, so there is absolute clarity. Both parties should be given the chance to take legal advice on the contents of the agreement, and it should be essentially fair. If these criteria are met, it is very likely that the court will uphold the agreement in the event of a dispute.
Varying or Ending a Cohabitation Agreement
Usually there will be provision in the agreement which permits it to be varied, so long as this is in writing signed by the parties. This is to allow for a change in the parties’ circumstances, say after the birth of a child. However, it may be a good idea to speak to a solicitor before making any changes. If the relationship ends the agreement will describe how joint property is to be shared, including bank accounts, furniture and cars for example, how the house is to be occupied and the terms on which the leaving party is required to vacate. Splitting up from a partner is stressful, so if there is a document which explains clearly what is going to happen it may save a lot of argument.
If the parents of a child are unmarried neither party owes the other any financial responsibility at all on separation. However, the parent who lives with the child is still able to make a claim for child support from the other, and an agreement (sometimes called a Family Based Agreement) may be concluded setting out what payments are to be made, and how often. Alternatively the Child Maintenance Service may be asked to make an assessment. In some circumstances an unmarried parent can use Schedule 1 of the Children Act 1989 to make a claim for capital, or even enhanced maintenance, for the benefit of a child. This might be useful where for example the mother of a child is told to leave the home that the parties shared, but which is owned by the father. Potentially the mother could ask the court for an order that the father provides her with capital for housing, which could then be returned to the father when the child grows up. It’s a good idea to speak to a solicitor if you find yourself in this situation.
The agreement will usually terminate upon marriage, as the legal status of the parties will have fundamentally changed, but a couple contemplating marriage could then enter into a pre-nuptial agreement instead, if they wished to do so.
A cohabitation agreement provides both parties, and their families, with certainty and security about their financial arrangements while they are living together. If the relationship breaks up the agreement will tell the parties what arrangements to make to separate their affairs in a calm and fair way.