Marriage and civil partnerships are well known for being legally distinct ways of securing assets between two people in a relationship, but cohabitation agreements present a third, less formal option.

Part of the lack of understanding around cohabitation agreements is the belief that they are only for couples.
In reality, any people living together can get a cohabitation agreement even if they are not romantically involved.

As such, it is worth understanding what a cohabitation agreement is and how it might be helpful for your situation.

What is a cohabitation agreement?

A cohabitation agreement is a legally binding document that clearly sets out who owns what assets in a shared property.

For couples who are attempting to avoid the formality of marriage or a civil partnership, a cohabitation agreement might seem an intense option.

For people not in a romantic relationship, like friends in a house share, it might seem even more unusual to formalise asset ownership.

With the current economic challenges, it is increasingly common for people to find different living arrangements to help manage the bills.

This has seen a rise in people sharing homes with relatives, most commonly siblings, or friends to help mitigate costs.

While some will occupy furnished flats where assets are mostly owned by landlords, some people buy property with friends or relatives or live in unfurnished rental property together.

What should be included in a cohabitation agreement?

Although house shares do tend to come with personal spaces where your own private possessions can be stored, it is not uncommon for shared assets to be acquired over time.

These assets can be the focus of the cohabitation agreement as they represent significant value and benefit multiple parties.

If the relationship with your friends or siblings sours, having the division of assets clearly defined can help prevent further arguments.

This will be especially useful if one party did more to furnish the property than the others and would like to keep ownership of those assets if the living situation changes.

Speaking of changes, you should keep on top of cohabitation agreements to make sure they cover any notable changes to your assets.

If you get a shiny new TV to bring the house together in the living room, you should update your cohabitation agreement to accommodate it.

From a legal standpoint, gifts can occupy a murky space in terms of who owns them.

If your housemate buys you a sizeable gift, like a car, but completes the purchase in their name, they would be entitled to that car at any point, regardless of whether they gifted it to you.

A cohabitation agreement can serve to protect any such gifts and ensure that they remain in the possession of the person who received them rather than the one who bought them.

If children are involved and you are co-parenting with someone, the provisions for a child can be included in a cohabitation agreement.

These are not necessarily legally binding, as the court will ultimately have the power to overrule any prior agreement and act in the best interests of the child.

We know that Essex is home to a range of diverse people embracing new ways of living.

Part of the charm of this community is the unique households that form as friends and relatives cohabit to tackle the rising costs of living.

At Palmers, we want to empower you to keep finding the best path in life that suits you while preserving your legal rights.

To find out more about whether a cohabitation agreement is right for you, speak to our team today.