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What is a Cohabitation Agreement?

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A cohabitation agreement records arrangements between two or more people who have agreed to live together, as a couple or otherwise.

The agreement usually sets out the following criteria

  • • Each party's rights and responsibilities in relation to the property where they live/ intend to live together,
  • • Financial arrangements between them, both during and following cohabitation
  • • Arrangements to be made if they decide they no longer want to live together.
  • • Ownership of personal property including cars, furniture or art which may be enjoyed by both but retained by the owner if the cohabitation was to end.

A Cohabitation Agreement can avoid the cost of litigation if the cohabitation ends. Cohabitation Agreements are generally used by couples who do not want to marry and would like to put their financial resources together to purchase a property.

In particular to shared property, the agreement can regulate the following:

  • • Payment of household and living expenses pending sale.
  • • How and by whom the property is to be valued.
  • • How the costs of sale are to be paid and by whom.
  • • How the proceeds of sale are to be divided.

Advantages

  • 1.  Avoid the cost and uncertainty of litigation
    • • Reduces possibility of a dispute about ownership if cohabitation ends
  • 2.  Individual independence
    • • Flexibility and freedom to organise their financial affairs as they wish
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  • 3.  Preservation of Assets
    • • Evidencing beneficial interests in co-owned property and ultimately safeguarding their investment

Disadvantages

  1. 1.  Uncertainty about enforceability
    • • Uncertainty about whether terms of a cohabitation agreement will be enforced at court as they thought to encourage relations outside of marriage
    • • Recent understanding is that cohabitation agreement are now enforceable nevertheless there is no recent cases to test this point
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  1. 2.  Cost
    • • Can be an expensive procedure
  1. 3.  Risk of relationship breakdown
    • • Couples often find it hard to raise the question of entering into a cohabitation agreement in particular if the property is only owned by one person or where one person has a greater share
    • • Indicates uncertainties about their honesty and commitment

 

If you think you would be interested in having a Cohabitation Agreement drafted by a solicitor or require any further advice on the above, please do not hesitate to contact our family department.

Please contact Sally Ward on 01245 228118 or at wards@gepp.co.uk or Keeley Lawrence-Hoyle on 01245 228106 or at Lawrence-hoylek@gepp.co.uk