Avoiding the cost and uncertainty of litigation
Cohabitation agreements are a helpful way of recording a cohabiting couple's intentions about their real and personal property when they decide to live together. Former cohabitees can often spend vast sums of money on litigation to determine their respective shares in property which they either co-own or which is owned solely by one of them but which the non-owning party may have made financial or domestic contributions towards.

A well drafted cohabitation agreement records each party's legal and beneficial interest in the property. This reduces the possibility of a dispute about ownership if cohabitation ends. The agreement can include clauses that regulate the following:
- Occupation of the property and 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.

Having a cohabitation agreement in place and discussing each person's rights and obligations in relation to the property at the outset of living together can therefore avoid the acrimony, cost and uncertainty of litigation after cohabitation ends.

Individual autonomy
Entering into a cohabitation agreement gives cohabitees the flexibility and freedom to organise their financial affairs as they wish, both during and following cohabitation. Current legislation does not entitle a cohabitee to make a claim for maintenance or to claim a share of their former partner's assets as of right, if cohabitation ends. A cohabitation agreement can include clauses for maintenance to be paid to a former cohabitee, to allow for one party to readjust financially after cohabitation ends.

Preservation of assets
Having struggled to save a deposit, cohabitees are less willing to risk a future dispute arising about ownership of the property. Cohabitation agreements can evidence beneficial interests in co-owned property and ultimately safeguard their investment. Where parents have gifted, loaned or invested funds to enable a child to make their first property purchase and the child subsequently wishes to cohabit with a new partner in the property, parents sometimes insist on the execution of a cohabitation agreement to protect family money invested in the property.

Uncertainty about enforceability
There is uncertainty about whether the terms of a cohabitation agreement will be upheld and enforced by the court. The view expressed by many commentators is that cohabitation agreements that regulate the financial and property affairs of cohabitees are enforceable. There have however been no recent cases testing this point.

Cost
Depending on the parties' circumstances and the complexity of the terms agreed, entering into a cohabitation agreement can be an expensive process. Despite the benefits that these agreements offer, many cohabitees do not want to incur the additional costs of negotiating and executing a cohabitation agreement.

Risk of relationship breakdown
Parties can often find it difficult to raise the question of entering into a cohabitation agreement with their partner, particularly where the couple will be living together in property that is solely owned by one of them. Non-owning cohabitees may perceive the request as their partner doubting their sincerity and commitment to the relationship. Some feel contemplating what should happen at the end of cohabitation, before they have even begun living together, indicates doubts about the permanence and longevity of the relationship

There is no set rule as to when a cohabitation agreement should be executed. If property is being purchased with the intention of it being occupied by cohabitees on completion of the purchase, it is advisable for the agreement to be executed on completion, so that the parties' intentions are clear and have been recorded at the outset.

Alternatively, if the intention to cohabit is formed after a property has been purchased, a cohabitation agreement can be executed at any time, before or after cohabitation has begun.

It is not critical for execution of the agreement to occur before or to coincide with the commencement of cohabitation.

It is more important to ensure that the agreement is not executed at a time when either party could allege that they were in a vulnerable position which was exploited by the other exerting undue pressure or influence on them, as this could render the agreement voidable