Cohabitation Agreements

Browndog Agency Blog

Divorce rates have fallen to their lowest level for 40 years. This may be affected by the increased cost of court fees and reduction in legal aid but also due to couples choosing to live together rather than marry.

Cohabiting couples have become the fastest growing type of household in Britain. There are a number of reasons for this. Historically, living with a partner out of wedlock was frowned upon but this is now much more socially acceptable and the cost of a wedding will no doubt cause some to have second thoughts (the average wedding now costing in the region of £24,000!).

When a couple marry they create a legal relationship with each other. If that relationship breaks down there is specific statutory law to assist the couple in determining what is to happen regarding their finances. Unfortunately, there is no similar provision for unmarried couples and therefore it may be necessary for cohabiting couples to give greater thought as to what would occur upon the breakdown of that relationship.

The main concerns are usually any dependant children and the family home.

In relation to dependant children this is less of a problem as the Children Act 1989 enables the court to assist in child arrangements irrespective of whether a couple are married or not. The court have powers to make orders relating to practical arrangements, for example who a child lives with and what time they will spend with the non resident parent etc. The court also have powers to make certain financial orders for the provision of those children.

It can however, be problematic in relation to the family home. There is an urban myth that unmarried couples living together for a specific period of time grants them the same legal entitlement as that of a married couple. There have been numerous occasions when clients have sought advise stating that they are “common law” spouses. This is not the case.

The law relating to property for unmarried couples can be very complex. Each case needs to be dealt with on it’s specific facts with numerous issues affecting the outcome. The difficulties usually arise as it is unclear as to what each person intended to happen with the family home upon the breakdown of the relationship. It may be that the family home is owned by one person already and that they consider it to be their property but that their partner has made contributions to the purchasing of or improvements to the home and therefore consider that they should have a financial interest in it. The property may have been bought jointly but with one person having made a much greater contribution either by paying a larger deposit or monthly mortgage payments.

It is usually preferable for couples to therefore consider what arrangements they will have whilst they live together and also what is to happen should the relationship breakdown, and for those arrangements to be properly documented in a Cohabitation Agreement. Not only does this make it clear as to what each person expects of the other during the relationship but can significantly reduce the cost and stress of possible contested court proceedings.