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Cohabitation Agreements, The Bank of Mum and Dad

Now more than ever, couples are choosing to live together before or without getting married. In fact, cohabiting couples are the fastest growing family type – even overtaking the growth of ‘traditional’ households consisting of married couples with children.

Last updated on May 20th, 2021 at 08:22 pm

From careers and travel to child-rearing and living arrangements, it’s clear that people are moving away from ‘conventional norms’ and choosing a lifestyle that reflects their current situation and future goals, both personal and economic.

In terms of living arrangements, more people are renting for longer, moving back in with parents later on in life, living alone or buying a property and cohabiting with a partner to cover the rising cost of living. For the latter, it’s important to know that there’s one thing in this evolving world that remains the same – there’s no such thing as a ‘common law spouse’ and unmarried couples who live together don’t have the same legal rights as those who are married.

When a relationship is working well and everyone is happy, it’s difficult to envision a time when that may not be the case – and even more difficult to plan for such an eventuality. But in unfortunate circumstances where relationships break down, the complex effects can spread beyond the couple into the respective families, especially when whoever bought the house did so with the help of the “Bank of Mum and Dad”.

It’s increasingly common for parents to step in financially when their children want to take that first step onto the property ladder. Whether gifted or loaned, this financial leg up has meant the Bank of Mum Dad (also known as BOMAD) is now officially a top ten mortgage lender. Parents are lending almost £7bn to their offspring every year, and so protecting the financial investments of both lender and buyer has never been more important.

Arranging a cohabitation agreement with a trusted team of expert family lawyers can help to make sure everyone involved is protected in the event of a separation.

Here we examine some of the key queries your family solicitor would cover when you’re looking to arrange a cohabitation agreement:


What is a cohabitation agreement?

If you live with your partner, or you are planning on living together, you can enter into a cohabitation agreement, also known as a living together agreement. This can set out the ownership of existing assets (including property), what your financial responsibilities will be towards each other and how savings and jointly owned assets will be distributed should you later decide to split.

Why should I have a cohabitation agreement?

Many unmarried couples who live together assume that ‘common law marriage’ protects them in the same way as married couples. However, couples who live together do not have the same legal rights as married couples or those in a civil partnership. A cohabitation agreement can provide peace of mind in your relationship.

By coming to an agreement before or whilst you are living together, you will:

  • have a clear understanding of what your financial commitments are
  • avoid misunderstandings regarding your rights and responsibilities as you continue to live together, in particular with regards to ownership of property
  • avoid difficulties and disagreements if you split up
  • have clear evidence of your intentions should you have to go to court

Who does a cohabitation agreement protect?

A cohabitation agreement can protect either or both of you if your relationship breaks down. It can also protect family members, i.e. parents, who often help their children to get on the property ladder by providing a deposit via the Bank of Mum and Dad. A cohabitation agreement makes it clear how the pre-owned assets of one partner are to be shared with the other if you break up or if the property is owned in the sole name of one person and their partner moves in. It can make it clear for both partners that contributions towards utility bills by one partner may not entitle them to a share of the property itself if you should break up. It can also protect the economically weaker partner.

What is the legal position if my partner and I live in a property that one of us owns?

If one of you owns a property that you are both living in, a cohabitation agreement will outline your rights to the property and make it much easier to understand exactly what you’re entitled to in the event of a break-up. It will mostly cover how you will share the rent/mortgage and bills between you and how bank accounts, money, property and assets are divided if you should separate. Without a cohabitation agreement, if you own the property, your partner may be able to claim ‘beneficial interest’ in your property and, if successful, your partner may then have the right to:

  • live in the property
  • a share of the income if the property is rented out
  • a share of the profit of the sale if the property is sold

How do I make a cohabitation agreement?

At Graysons, our highly experienced family lawyers are experts in this field and have helped many couples setting up home, or already living together, to draw up agreements that are tailored to their own individual needs.

How much does a cohabitation agreement cost?

Our family solicitors can advise the cost once we’ve reviewed how complex your living arrangements are going to be and how much detail you want to include in your cohabitation agreement. As a guide, the cost will be roughly between £650 – £1500 plus VAT. One thing’s for sure, it will be a lot cheaper than battling out later disputes in court without one.

Why should I make a will?

If you are intending to cohabit as an unmarried couple or a couple not in a civil partnership, it is essential that you each make a will if you want your partner to inherit your estate if you die.

Contact our family law solicitors now to discuss your individual needs or to make an appointment for a confidential meeting.



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