Moving in with your S/O? Consider a cohabitation agreement
Deciding to move in with your partner is an exciting step that many modern couples are choosing to take. Historically, couples would usually cohabit only after marriage. However, societal norms have changed over the last few decades and we are now seeing a marked increase in couples choosing to cohabit. We have also seen that COVID has led to many couples choosing to move in together to avoid restrictions upon spending time with those outside an immediate ‘bubble’.
There are many common misconceptions about the rights of those who cohabit, both in terms of rights of occupation and any interest accrued in the property. This misunderstanding has unfortunately led to a rise in the number of disputes regarding cohabitees appearing in the courts.
The perpetuating myth of a ‘common law marriage’ means that many couples are under the misguided belief that if they reside with their partner for long enough, then the courts will view their relationship as being equivalent to a marriage or civil partnership in terms of the rights afforded to married couples and civil partners. This is incorrect. In fact, there are stark differences between the rights of married couples/civil partners and cohabitees.
So, what are the things that you should consider before moving in with your partner?
- Where will you live?
This might seem like an obvious point to consider but the nature of ownership of the property is very important.
If a couple elect to rent a house together, they must then consider what personal liabilities they would incur if they were to separate. For example, if a couple separates and one party moves out of the property, the other may be tied into a rental agreement for a fixed term without any financial assistance from the other party towards the rent and outgoings.
If a couple decide to purchase a property together, they must consider on what basis they intend to hold that property: do they hold the property in equal shares, or do they intend to hold the property unequally, perhaps reflecting their contribution to the purchase price?
If a couple decide to move into a property, which is already owned by one of the parties, they must consider whether it is their intention that, upon moving in together, the partner who is not named on the Title Deeds will gain an interest/share of that property.
Many people (wrongfully) assume that if they live in a property for years, they automatically accrue some form of interest or ownership. Whilst it might be possible to argue in court that a party has accrued an interest, if the facts of their situation satisfy certain criteria, there is no automatic accrual of an interest. This means that in order to establish this interest, parties usually have to go through court proceedings, which inevitably incurs a cost to both parties.
Does the couple intend to intermingle their finances or keep them separate? What amount will each party contribute to the running of the property? Will these funds be kept in a joint account, or paid solely from the account of one person? Will the outgoings of the property be met jointly or solely by one party?
If a couple intends to have children together (either prior to marriage/civil partnership or, as is common nowadays, without intending to marry or enter into a civil partnership), consideration needs to be given to the provision being made for the children.
Alternatively, if the parties already have children, either together or from a previous relationship, the parties need to consider how the financial needs of these children will be met.
It is clear just from the points made here in this brief bog post that careful consideration ought to be given to the specific facts of a relationship and the intentions of the parties to it. One size does not fit all when it comes to protecting individual rights when moving in with your partner.
What can you do to protect yourself?
We would recommend that any couple moving in together consider getting a cohabitation agreement.
A cohabitation agreement is simply a legal document which sets out any agreement that the couple have reached in relation to the ownership of the property, their finances, and the day-to-day arrangements of their life together as a couple.
Whilst we appreciate that having an agreement drawn up may not appear very ‘romantic’, the agreement can be as minimal or as extensive as the couple wishes, and arguably more importantly, the process itself allows for both parties to understand their current and future rights and establish clearly what the intentions are.
How can we help?
Here at Hill and Company Solicitors, we think it is important to approach matters with care and with the understanding that any form of agreement is put in place for the protection of both parties.
We also believe that the introduction of an agreement should be seen as sensible financial planning, as it gives both parties the opportunity to clarify their intentions and plan for their future as a couple effectively.