What is a cohabitation agreement?
A cohabitation agreement is a document that sets out the terms of living together. The document will address who is responsible for mortgage payments, utilities, maintenance, and renovations.
The document will also set out whether one party can obtain an interest, or greater interest in the property. For example, by making payments towards the mortgage, utility bills or renovations.
Who needs a cohabitation agreement?
- If you live in a property that you solely own and your partner moves in.
- If you are solely purchasing a property and your partner is moving in with you.
- If you own or are purchasing a property jointly.
Why do I need a cohabitation agreement?
A cohabitation agreement sets out the parties’ intentions when the agreement was signed. When done correctly, this limits the ability to dispute the ownership of the property. A cohabitation agreement protects both parties in the relationship and removes uncertainty if the parties separate.
If you do not have a cohabitation agreement, the other party may try to argue for a share, or greater share, in the property based on contributions to mortgage payments or renovations to the property. This can be done through the Trusts of Land and Appointment of Trustees Act 1996 (ToLATA) usually by showing that they have paid a large lump sum off the mortgage or paid for renovations such as a new kitchen or bathroom or extension to the property.
With a cohabitation agreement both parties have clarity as to what contributions will result in obtaining a share or greater share in the property.
What steps do I need to take to get a cohabitation agreement?
When you have agreed the terms of your cohabitation agreement with your partner, you will need to complete the following steps:
- Instruct a solicitor to draft the terms into a cohabitation agreement.
- Ensure that both parties have had the benefit of financial disclosure and independent legal advice.
- Sign the document as a deed.
If you would like any assistance with drafting or advice on a cohabitation agreement, please contact Daniel Williams on 01905 721600 or via email daw@parkinsonwright.co.uk