Living Together Agreement (Co-Habitation)
There is no such thing as common law spouse. It is a myth. It often confuses couples. If you are not married, you do not have any financial claims against your partner’s assets. However, rights may arise in relation to property under trusts law.
What you need to know about the Cohabitation Agreement
Wouldn’t drawing up a cohabitation agreement harm our relationship?
This is a personal decision and is often a similar point that is raised in relation to pre-nuptial agreements. Sometimes honesty about finances at the start of a relationship can lead to greater trust. If one of you already has a property you want to protect, then a cohabitation, or living together, agreement may be a wise move.
What should we cover in a cohabitation agreement?
You can cover issues such as who will pay the outgoings on the house where you live, what happens to items you purchase jointly or independently, what rights to non-owning party may have against the house.
Can we use an informal cohabitation agreement or does it need to be a legal document?
The cohabitation agreement will have to cover a number of points to ensure it is valid including financial disclosure and also the parties having independent legal advice on the terms of it. If you have any doubt, always seek independent legal advice.
Is a cohabitation agreement legally enforceable?
If both parties have had independent legal advice on the terms of the agreement and there has been financial disclosure, it is likely that the terms of the cohabitation agreement would hold up in court if there were to be a dispute. For example, if one party tried to claim against the home owned by the other party, if there is a properly drafted cohabitation agreement in place then the court is unlikely to go against it.
What are the options if one of us owns the property we live in?
You need to decide how any contributions that the non-owning party makes to the household outgoings may affect any claim against the house. If the non-owner pays the owner a monthly amount to cover the mortgage and bills, then if the mortgage is paid by the owner then it is unlikely that the owner would acquire a beneficial interest. If they pay for some renovations or improvements this may be a different situation. If in doubt seek legal advice to ensure you are protected.
How can I ensure that we are not liable for each other’s debts?
Unless the debt is joint, such as a joint loan, then the debt remains the liability of the party in whose name it is. Therefore it is important to bear this is mind if for example one of you buys items on the credit card such as household goods, it will be the person in whose name the credit card is who will be liable to repay this – the creditor will only be able to sue the person who is legally responsible for the debt. If there is a joint loan, you will both be jointly and severally liable. If you then split up, the loan company will not simply chase you for half the loan or apportion the debt, they will go after whoever is most likely to pay!
How often do we need to review our cohabitation agreement?
If your circumstances change, such as one of you buys a new property, then the cohabitation agreement may need to be reviewed. If you plan to marry you may want to put in place e a pre-nuptial agreement.
Living Together Agreement
“Living Together Agreement” sets out who will be responsible for the outgoings on the property where you are living and who will own what, in terms of the property and any contents. This is particularly important if the house is owned in one person’s sole name and can set out whether the other person (the non-owner) will have any financial claim against that property in the unfortunate event of separation.
If you already separated...
If you have already separated and cannot reach an agreement regarding the ownership of the property, SSB Law can provide you with advice as to the likelihood of a financial claim and if you are the one trying to make the claim, we can assist you with the Court process in making a claim against the property.