If you are not married or in a civil partnership and have chosen to move in with your partner, it is advisable to enter into a Cohabitation Agreement. The number of unmarried couples has doubled since the mid 1990’s but the legal status in unchanged.
Many unmarried couples mistakenly believe that if they are together for long enough they have a ‘common law marriage’. Unfortunately, this is not a recognised phenomenon under English and Welsh law where the length of the relationship has no bearing on your rights upon separation. This was recently recognised in the case of Dobson v Griffey  EWHC 1117 (Ch) where the High Court decided that a former unmarried partner was not entitled to a share in the proceeds of the sale of a farm in Devon which had been bought in her previous partner’s sole name. She was unsuccessful in her argument that she was entitled to a share based on a common intention construction trust or proprietary estoppel following her contributions to renovating the property.
Entering into a Cohabitation Agreement can help to save parties from significant financial and emotional hardship if the relationship later breaks down. It can be difficult to bring up the question of entering into a Cohabitation Agreement with a partner, particularly when the property is solely owned by one of them, as it can appear that the longevity of the relationship is being questioned. However, a Cohabitation Agreement can also set out what the parties would like to happen if one person becomes incapacitated or unable to make financial contributions for any reason.
The Cohabitation Agreement will record the couples’ intentions in relation to the legal and beneficial ownership of the property and its contents.
If an unmarried couple are buying a house together, they should be aware that if they hold the title as joint tenants, the automatic position will be that they each own 50% regardless of contribution unless they expressly specify an alternative. When jointly purchasing a property, unmarried couples should in the first instance enter into a Declaration of Trust which simply records the parties’ respective beneficial interest in the property.
The difference between a Declaration of Trust and a Cohabitation Agreement is that the Cohabitation Agreement goes into far more detail on a range of issues including:
- What day to day contributions each of the parties will make
- What should happen if the relationship breaks down
- What should happen if the couple decide to have children
- What should happen to personal possessions
15th May 2018