Cohabitation Agreements & Disputes
There is a common misconception that if an unmarried couple live together, they will be considered ‘common law’ spouses and will benefit from the same rights which are bestowed upon a married couple. This is not the case. The Courts in England and Wales do not recognise ‘common law’ husbands and wives.
It is often the case in cohabitation cases that one of the parties will find it difficult to prove that they have acquired an interest in certain assets (particularly if these are not held jointly), such as property. A common example is where a property in which the parties live is registered in only one name. A number of factors will be taken into account by the Courts including financial contributions and intentions.
The onus falls on the party who is not registered as a legal owner to assert that they hold an interest in the property. There are ways of evidencing a “beneficial” interest in property if your name does not appear on the deeds which we can discuss with you in depth along with the merits of any claim.
In order to avoid such disputes, it has become increasingly common for cohabitees to enter into an agreement seeking to regulate the basis for their cohabitation and how any intended interest(s) in assets may crystallise and be divided on any future separation. The agreement will usually direct how the net equity in any property is to be divided on an eventual sale and can also regulate how other assets and finances should be apportioned on the unfortunate breakdown of a relationship.
Although people are reluctant to consider these agreements at the outset of a relationship, the advantages of having such an agreement should not be underestimated. A properly drafted agreement can prevent the emotional stress and cost of entering into lengthy litigation to solve any consequent dispute.