Cohabitation Agreements – Why Do You Need One? | McGuinty Law

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What are Cohabitation Agreements?

You may get into a cohabitation agreement if you reside with your spouse or intend to live together (whether as a heterosexual or same-sex couple) (sometimes called a living together agreement). This may specify who owns current assets (including real estate), what your financial duties will be to each other, and how savings and jointly held assets will be handled if you subsequently divorce.

Cohabitation Agreements - Why Do You Need One McGuinty Law

More and more couples are choosing to live together before marrying or entering into a civil partnership or to have their relationship legally recognized at all (by marriage or civil partnership). However, cohabiting does not provide you with the same legal rights as marriage or civil partnership since it does not legally bind you together. When couples who live together or have joint assets separate, this may cause problems and uncertainty.

You have no stated legal rights in a relationship except for jointly held assets if you are not married or in a civil partnership.


What can a cohabitation agreement cover?

The cohabitation agreement specifies who owns what and in what proportion in the relationship and addresses issues such as the following:

  • Ownership of property
  • Pets
  • Deposit on your home
  • Payment of debts
  • What share of the mortgage or rent you will pay
  • Pensions
  • How household bills will be dealt with
  • Life insurance
  • Bank accounts and money
  • Assets such as cars, furniture, other property, jewellery
  • Next of kin rights

Pension access, property ownership documents, and wills should all be taken into account.

What should be included in a cohabitation agreement?

Although each cohabitation agreement is unique and relies on your specific circumstances, there are a few crucial aspects to consider before seeing a solicitor:

  • Property owned before moving in together – If one spouse has property, a cohabitation agreement might stipulate that it be kept separate and that the other partner has no claim to it. However, if the spouse who does not own the house contributes to the mortgage or does remodelling work, they may have a claim to the property in the future, so keep an eye out for this.
  • Property bought while living together – If you acquire a home while living with your partner and only one of you is mentioned on the agreement, you must handle this in the same manner as described above. If you are identified as joint owners, you both have the legal right to remain in the property if your relationship ends. You must consider what will happen to the jointly held property after the divorce, such as if it will be sold.
  • Household bills – If you and your partner are not joint owners of your house, or if one of you contributes more than the other, one of you might agree to contribute to the mortgage while acknowledging that this does not give that person any claim to the property.
  • Inheritance and wills – It’s vital to know that if you’re not married or in a civil partnership, you won’t inherit each other’s assets if one of you dies. If you wish to leave anything to your partner, you must write a will and maintain it up to date.

Independent legal advice – When drafting a cohabitation agreement, you should both get independent legal counsel to ensure that it is legally enforceable and that there is no ambiguity about what you are both committing to. By doing so, the court is far more likely to take note of your agreement and enforce it if you split up. Your financial position should also be disclosed. The document should be completed in the form of a deed.

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Why should I have a cohabitation agreement?

Many couples believe that if they live together but are not married or in a civil partnership, ‘common lawCohabitation Agreements - Why Do You Need One marriage’ protects them in the same way that married couples do. However, such legislation does not exist. This idea is false since couples who live together do not have the same legal rights as married couples or those in a civil partnership.

A cohabitation agreement might help you feel more at ease in your relationship. By reaching an agreement before or while you are living together, you will have a clear understanding of your financial obligations, avoid misunderstandings regarding your rights and responsibilities as you continue to live together, especially with regard to property ownership, avoid difficulties and disagreements if you split up, and have clear evidence of your intentions if you have to go to court.

Who does it protect?

In the event of a relationship breakdown, it can protect either of you or both of you. It may function similarly to a prenuptial agreement in that it specifies how one partner’s pre-owned assets will be divided with the other if the couple splits up in the future or if the property is held solely in the name of one party and another party moves in. It can make it clear to both partners that contributions to utility bills by one partner may not entitle them to a share of the property itself if the relationship ends.

It may also provide protection to the economically weaker spouse. For example, if you are a parent who has given up your career to care for your children and the family home is solely owned by your partner, your efforts to caring for the house and raising the children would be recognized as an equal contribution if you were married or in a civil partnership. If you are not married or in a civil relationship, you may be left with nothing, even if your spouse has financially supported you for many years.

If you own property together as cohabitees, the starting point is that it is split 50/50 on separation as joint tenants, even if one spouse paid much more to its acquisition, unless you make a formal agreement to declare differing shares (such as a tenancy in common). There may be exceptions, in which case you should seek legal counsel.

A cohabitation agreement is essential to ensure that your joint intentions to establish a home together are enforceable and provide the protection you both seek.

What rights do I have with a cohabitation agreement?

Because you do not have the same rights as a married couple or a couple in a civil partnership when cohabiting, a legal document such as a cohabitation agreement (as well as a will) can be useful if you separate – the hope is that you have dealt with the issues from the start, avoiding expensive litigation and providing an accurate reflection of both parties’ intentions when living together.

A cohabitation agreement may be reviewed and altered on a regular basis with the assent of both parties.