Cohabitation agreements: are they necessary?

With divorce law recently changing to provide for ‘no blame’ divorces, you would be excused for thinking that the law relating to cohabitation has also changed for relationship breakdown.

This is not the case; there is no legal framework totally dedicated to relationship breakdown for cohabitants. Remedies that may assist are drawn from a variety of areas and may not provide a solution. As cohabitation has seen the fastest growth as a family dynamic, it is surprising that this area of law has not developed a dedicated approach.

There has been some movement towards reform in recent years due to a changing family dynamic. The Law Commission provided a report in 2007 which recommended that a court should have the power to redistribute the ownership of the family home upon separation. However, despite a bill being introduced by the House of Lords in 2015, it was defeated.

Of course, any disputes concerning children can be considered through mediation and/or court, under the Children Act 1989. Married applicants and cohabitees can apply.

The real issues start to unfold in relation to a dispute over ownership of the family home.

Often, questions arise such as who should live in the home upon breakdown, and how the equity should be distributed if a specific agreement is not in place. Temporary solutions can be found under the Family Law Act, which include an application for an occupation order if there has been domestic abuse. In practice, however, this remedy is difficult to obtain.

Disputes around ownership often arise because:

• one person owns the home (for example, if one cohabitant had a poor credit rating on purchase that would have adversely impacted mortgage rate or approval);
• unequal contributions when purchasing the property;
• one party claims more equity should follow their way upon separation.

The remedies in these areas usually rest upon trust and case law. There are other acts that could assist, for example if the parties were engaged, but even this legislation does not give a definitive resolution to how property should be settled. Case law has since evolved to be more flexible, but it cannot be understated that a case will turn on the facts and often, the parties’ intentions are not clearcut without express intention.

For all these reasons and more, cohabitants should prepare a ‘lives with’ agreement or a cohabitation agreement, as these provide for express intentions at the start of the relationship and upon potential breakdown. Entering into these agreements may not be the most romantic gesture, but in the event of a breakdown, they are invaluable.