Info & Advice

Is a cohabitation agreement legally binding?

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It does not matter how long you have lived with your partner, unless you marry or enter into a civil partnership, you will not acquire the same financial protections, or be able to make the same claims as married couples or civil partners can. Entering into a cohabitation agreement and setting out what happens to your assets in the event you separate, is a sensible precaution. But is it legally binding? Read on to find out.

A cohabitation agreement is a contract enforceable by the court providing it is properly executed (completed) and you have both been honest about your finances. You must also have each taken independent legal advice on the agreement’s terms.

What makes a legally binding or valid cohabitation agreement?

In order for a cohabitation agreement to be considered valid, or legally binding, the following conditions must be present:

  • You should both enter the agreement voluntarily and without undue influence or coercive control of the other party
  • The agreement should be set out in the form of a deed. This is a signed formal legal document that is always written and confirms an agreement or binding obligation is being created
  • Each party must sign the agreement and their signature witnessed by someone who is not party to the agreement

Ideally, you should regularly review the cohabitation agreement and make changes if necessary. For example, having children, or purchasing a family home, has the ability to alter the terms of the agreement. Other key reasons may include:

  • One of you becomes seriously ill or disabled
  • One of you is made redundant
  • Your financial circumstances significantly change
  • One of you receives an inheritance
  • You plan on getting married or entering into a civil partnership (unless the agreement accounts for this occurrence)

In the event of the relationship breaking down, the court is more likely to uphold its terms if the agreement has kept up with major life adjustments. That said, any alterations must be made properly. It is unlikely a court will find an agreement valid where clauses are crossed out and handwritten over the top.

When is the best time to consider a cohabitation agreement?

Cohabitation agreements can be made at any time in your relationship, but ideally, it is a good idea to consider entering one before you live together so that the terms are set out clearly from the beginning. That said, it is possible to make a cohabitation agreement even if a couple has been living together for many years.

Can I draw up my own cohabitation agreement?

Whilst it is possible to find cohabitation agreement templates online, the agreement should be specific to your circumstances and tailored accordingly. Whereas a simple template may miss something essential.

For an agreement to be upheld in court, it is important that both parties seek independent legal advice to ensure neither of you is in any doubt as to what the agreement covers, and that there are no mistakes within the document.

If you decide to separate after living together for a long period of time, cohabitation agreements can save you a substantial sum of money and time. Without a cohabitation agreement, if there is a dispute surrounding ownership of a particular asset, it could result in legal proceedings, which are lengthy and costly.

Is a cohabitation agreement enforced in the civil court or family court?

If the terms of your cohabitation agreement need to be enforced, the family court will look at it extremely closely when deciding how the assets should be divided when couples separate.

Provided both parties have been honest about their finances and assets, it is likely that a court would enforce a properly prepared cohabitation agreement.

What should be included in a cohabitation agreement?

The agreement should deal with assets and finances, with the main considerations being:

  • Family home
  • Savings and investments
  • Payment of bills/household expenses
  • Pensions
  • Personal items such as furniture, including cars and jewellery
  • Debts, both those held jointly and in sole names

The agreement should set out who owns what and in what percentage. It may also detail how each party may contribute financially, including the mortgage and possibly how much each party will contribute to a joint bank account or credit card. It should also deal with what happens in the event of a separation and consider whether there should be a period of financial support whilst each party moves into their own accommodation. It should be noted that there is no legal requirement for one partner to financially support the other; this is the preserve of marriage or a civil partnership.

Fundamentally, every cohabitation agreement is different and should be tailored to meet individual circumstances.

Does a cohabitation agreement still stand if you get married?

There is often confusion surrounding whether a cohabitation agreement is still valid after a couple gets married. If your cohabitation agreement includes a clause whereby if you marry, then the terms continue, then it is likely the court will take this into consideration. But if you would like to have provisions in place which account for your finances and assets during marriage, it is probably sensible to formally covert your cohabitation agreement into a prenuptial agreement. If you married without obtaining a pre-nup and think this is something you should have done, you can draw up a post-nuptial agreement instead.

Should I have a declaration of trust instead of a cohabitation agreement?

A declaration of trust records the way in which the shares in a property are held and sets out how the proceeds of a sale would be divided if you separated. It will take into account your initial contributions, who will pay the mortgage, and who an increase in value will be attributable to after making home improvements.

Cohabitation agreements, on the other hand, are more comprehensive and set out what happens to the property if you separate. It also deals with the day-to-day matters such as the responsibility for household expenses and how costs of repairs or improvements will be dealt with.

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