Nov 23

Why should you consider having a cohabitation agreement?

Written by Claire Hunter
Associate

DDI: 01423 726620
E: claire.hunter@raworths.co.uk

Family law specialist Claire Hunter at Raworths based in Harrogate discusses cohabitation agreements and why you should consider one if you live with your partner.

The number of cohabiting couples (both opposite-sex and same-sex) increased by 150% from about 1.5 million in 1996 to around 3.7 million in 2022.  Opposite-sex cohabiting couples is the fastest growing family type over the last 10 years and of those families, over one third have dependent children.

However, unlike marriage and civil partnership, which give statutory rights and obligations, cohabitation gives no legal status to the couple who have few, if any, rights against each other at the end of the relationship.  This is widely misunderstood.

According to research, many people still believe they have rights as a ‘common law spouse’ (especially if they have children).  This is a complete myth, whether you’ve been together for 4 or 40 years.

Unfortunately, many people only discover this fact far too late and the lack of protection can leave one partner, often women, in a very vulnerable situation financially.

Broadly speaking, the rights cohabiting couples have against each other are limited to claims relating to property (where ownership or an interest can be proved) under very archaic laws, or claims on behalf of children. Whilst courts can make orders on divorce or dissolution to ensure there is a fair financial settlement between the parties, there are no corresponding laws to benefit cohabiting couples and this can lead to very harsh results even after a very long relationship.

If you and your partner split up then:

• If the house is owned just by your partner then they could force you to leave the property and sell it and you wouldn’t be entitled to any of the proceeds of sale
• If you co-own the family home (or any other property) then you would need to agree who keeps it and what payment the other person receives in return or whether it should be sold and how much you each receive from the proceeds. If you can’t agree who owns what shares of the property, or whether it should be sold, then you would have to ask the court to decide.
• You might have a claim against a property owned solely by your partner if you can show you have contributed to it, for example towards the deposit or mortgage, or you agreed you would have a share or they promised you a share, but this can be a very tricky issue to sort out.
• Any assets or liabilities you own jointly, for example joint bank accounts or loans, would be split equally (unless there is evidence of unequal ownership).
• Unless you can agree who keeps what, any household contents such as a fridge or TV, are usually owned by the person who bought the item.
• A family pet is treated legally in the same way as any other asset or household item, such as a TV. Whoever bought the pet is usually the legal owner.  So, if you want to keep the family dog but your partner owns it you’ll need to reach an agreement with them.
• If you have children and they spend the majority of their time with you then you can claim child maintenance from your partner, usually payable until the children leave school.

Depending on your partner’s financial circumstances, but especially if they are wealthy and/or have a high income, then through the court you might be able to claim for your children:

• Enhanced child maintenance; and/or
• Lump sums to be paid to meet specific costs for the children; and/or
• A property to be purchased or funded by your partner for the benefit of the children for them to live in (with you as their carer) often until they leave school (or sometimes university). However, you wouldn’t own the property and it would be returned to your partner at the end of the agreed term.

However, you have no right to claim:

• Maintenance for yourself, even if you’ve given up work for many years to look after the children and you have no income or savings of your own
• A share of your partner’s pensions
• A share of any savings or investments owned by your partner
• A share of any other assets or income owned by your partner

It may be possible to reach a financial agreement with your partner, even if it isn’t strictly what the law would impose.

If you and your partner were engaged then you may have some limited extra protection for up to 3 years after the engagement ends. It may be possible for you to claim an interest in a property owned by your fiancé(e) if you made contributions to improve the value of the property, such as paying for building works or doing the building work yourself, and those contributions were substantial. This is a little used remedy and can be a tricky issue to sort out.

You may have claims if your partner dies

Ironically, if your cohabiting partner dies during your relationship then you may have more protection than if you had separated. This is because you may be able to make a claim against their estate for financial support.

Law reform

In 2007, the Law Commission recommended that cohabitants, who satisfied certain eligibility criteria, should be able to make financial claims. However, the recommendations have never been implemented and there seems to be limited Parliamentary appetite for reform.  So, until the law is changed, it would be sensible for potential cohabitees to consider carefully the financial implications of living together and agree what should happen if they split up, to provide some certainty and try to minimise future dispute and costs.

If you plan to move in with your partner then you should consider a cohabitation agreement, which can set out:

• How any property and other assets are owned
• How household costs will be met
• Whether there should be some financial support if one of you has a career break or gives up work to look after children.
• How all assets (in joint or sole names and including the family pet!) should be divided if you split up or one of you dies.

Published on 28 November 2023