Cohabitation agreements – a fair way forward for unmarried couples?

There has been a significant number of inquiries following my ‘All unmarried couples should do this before buying a house together‘ blog published in September 2021, in which I set out a number of issues that unmarried couples should consider before purchasing a house together.

The reality for many couples is that, if they are unaware of their rights before living together, there may be deeply unfair – sometimes even disastrous – consequences for one party if that relationship ever were to end.

The familiar problem

I have encountered many deeply unfortunate situations where one party believed that they had legal rights simply due to the fact that they were living with their “common law spouse”, and have had to break the upsetting news that there is no such thing as a “common-law spouse” and that this is simply an old wives tale which somehow gained traction over the years.

In many situations, it is simply too late to remedy the situation where an unmarried couple separate.  This is due to the fact that, unlike married couples, the law offers very little protection for unmarried couples in terms of generating a fair and equitable outcome having regard to the length of the relationship, the roles which the parties have played in bringing up their children, and their future needs moving forward.

I have been asked on many occasions “what can be done”?  The short answer is “very little” unless the separation is an amicable one and the parties have agreed to “do the right thing” and provide a fair division of assets and income, regardless of each other’s legal entitlement.

A good solution – cohabitation agreements

However, for those couples who are at the beginning of their relationship, there is far greater scope to enable both parties to have some peace of mind in the event that the relationship fails.  It is possible for the parties to enter into a “cohabitation agreement”.  Such agreements typically set out how the parties intend to deal with their finances during the course of their relationship and – crucially – how they would wish to divide their assets and (if appropriate) their incomes in the event of their separation.

What are cohabitation agreements?

Cohabitation agreements are designed to be binding upon the couple in the same way as any other contract.  Breach of such an agreement may therefore give rise to one party being able to ask the court to uphold the terms of the agreement and force a reluctant party to uphold its terms.

The difference between cohabitations agreements and pre nuptial agreements

In a similar way to a nuptial agreement (which involves married couples), parties who wish to enter into a cohabitation agreement should always take independent legal advice. 

There should be a full appreciation of the rights which either or both parties may be acquiring or surrendering if they were to enter into such an agreement. 

They should be reviewed where, for example, children are born or there is a significant change in either party’s financial circumstances. 

Unlike prenuptial agreements, there is not necessarily an expectation that the terms of a cohabitation agreement must be fair. However, a cohabitation agreement can offer security and peace of mind to both parties who are proposing to embark on a life together. 

Importantly, such agreements can form the basis of the prenuptial agreement in the event that the couple subsequently choose to marry.

For any further information on cohabitation agreements, nuptial agreements or legal advice for unmarried couples, please contact Wayne Lynn on 07966 324324 or wayne.lynn@silkfamilylaw.co.uk.