Cohabitation

A cohabitation contract or agreement should be drafted with care to limit any scope for later disputes.  Both parties will need to ensure that:

1. You enter into the agreement freely and voluntarily; 
2. You have the benefit of independent and competent legal advice; and
3. Full relevant financial disclosure is made before entering into any agreement. 

The agreement should be set out in writing to avoid disputes about the terms of the agreement.  Having the agreement in writing is also necessary where you are recording the legal or beneficial ownership of any property under the Law of Property Act 1925.

Unfortunately, the range of financial claims that are available to a spouse or civil partner are not available to a cohabitant. Therefore, you and your partner may also wish to include financial provisions to be made in your cohabitation agreement, such as provision for a lump sum or periodical payments.  We would recommend you take legal advice in respect of what financial provisions would be enforceable before entering into the agreement. 

If you or your partner require the agreement to be changed, you may vary your agreement. It is advisable to state that the variation should be recorded in writing to avoid any uncertainty of oral agreements. 

In the event that you separate from your partner, you may wish to enter into a further agreement to regulate your financial liabilities and responsibilities on separation. Such an agreement may, for example, include provisions for arrangements for any children, personal property, bank accounts and liabilities.

We are able to assist in drafting cohabitation contracts, variations to such contracts, and separation agreements.  We strongly encourage you to seek independent legal advice if cohabitation is an option you are considering.

When you purchase a home with a cohabitant, it is important you accurately record in detail how the property is to be owned. You should be aware of the difference between legal ownership and beneficial ownership.  A legal owner is the person who owns the legal title of the land or property.  A beneficial owner is entitled to the benefits of the property. If you have a beneficial interest in a property, you may be entitled to: 

1. Live in the property; 
2. A share of the rental income, if applicable; 
3. A share of the proceeds of sale if the property is sold.  

Further, you will need to be aware as to whether the property is being purchased as joint tenants or tenants in common.  If you purchase the property as joint tenants, both of you are equally entitled to the whole property and in the event one of you passed away, that parties share will automatically pass to the other party.  If you purchase the property as tenants in common, each of you will be entitled to a specific share of the property and if you pass away your share of the property will be dealt with in accordance with your Will or the rules of intestacy.  When purchasing the property as tenants in common, you will stipulate at that stage what each of your shares shall be. 

If you begin co-habiting with a partner who already owns a property, you will not automatically acquire a legal or beneficial interest in that property.  Therefore, it is important you establish what your rights in respect of that property will be at the outset of the cohabitation.  You may wish to consider creating a trust to set out what your interest in such property would be. It is advisable that any trust is recorded in a deed, and we would recommend that you obtain legal advice when creating a trust to ensure it is valid.  

If any disputes arise after separation in respect of property which you have a legal or beneficial interest in, you may be able to apply to the court to resolve the dispute.  The dispute will be determined in accordance with the Trust of Lands and Appointment of Trustees Act 1996 (TOLATA).  Some factors which the court would need to consider when deciding matters pursuant to TOLATA are:

1. The intention behind the trust and why it was made; 
2. Whether the property is a residential property or is it let to tenants; 
3. Are there any children living in the property and how would the trust impact their welfare; and 
4. The interest of creditors of the property such as banks, mortgage companies or other lenders. 

Our specialist teams of family lawyers are able to assist and advise you in relation to TOLATA claims following the breakdown of your relationship.  

In cases where you have a child or children with a cohabitant and your relationship breaks down, you may be able to apply to the court for financial provision from your ex-partner pursuant to Schedule 1 of the Children Act 1989. 

Under this schedule, the court has the power to make the following Orders for the benefit of a child:

1. Periodical payments
2. Secured periodical payments
3. Lump sum orders
4. Settlement of property
5. Transfer of property

It is important to note that the financial provision can only be made for the benefit of the child.  Usually, orders can only be made until the child reaches the age of 18 although orders can be made for a child over the age of 18 in some circumstances for example when they are still in full time education or training for a trade. 

If you apply to the court for an order pursuant to Schedule 1 of the Children Act 1989, you and your ex-partner will need to provide detailed information in relation to your financial position.  Thereafter, the court will consider the following factors when considering what the appropriate level of financial provision will be: 

1. The financial circumstances of each parent both now and in the future;
2. The financial needs of any children;
3. The income, earning capacity (if any), property and other financial resources of the child;
4. Any physical or mental disability of the child; and
5. The manner in which the child was being, or was expected to be, educated, or trained.

If you need further advice or information in relation to Schedule 1 of the Children Act 1989, please do not hesitate to contact our specialist team of family lawyers who can assist you further.