You have been together for a year and it is getting serious. You both own your own flats. Although it might be serious there are no immediate plans to marry. Consider protection if you’re buying or selling a property.
You decide that as you have been staying together at one or other flat for the last few months it would make sense to sell the two flats and buy a bigger flat (or a small house) where you both could stay.
It makes sense on lots of different levels although there are potential pitfalls.
You will each be receiving the free proceeds from the sale of your flat but it may well be that the sums you receive will be of different amounts.
If these sums are to make up the deposit for the new property then there will have to be some form of agreement as to what might happen in the future if the relationship broke down and the property had to be sold. How would the free proceeds of that property be split between you?
It should go without saying that a verbal agreement is insufficient. You may get on really well at the moment but break ups can be acrimonious. Recollections of promises can vary and before you know it you might become embroiled in an expensive dispute.
The answer is to arrange to have a written contract drawn up. The contract is a type of Minute of Agreement called a Cohabitation Agreement.
This agreement will set out precisely what is to happen if there is a split up as far as the sale proceeds are concerned thus taking away any doubt. The agreement does have to be drawn up by a family solicitor but it is certainly worth the cost as it can prevent problems in the future.
The Cohabitation Agreement is also useful in respect of other matters
You may not be aware when you start living together that the date cohabitation begins certain legal rules come into force. These rules have little effect during the course of a relationship but they do matter if the relationship comes to an end. It may seem obvious that everything should be split down the middle but that does not always happen.
If one or other of you have suffered an economic disadvantage as a direct result of the cohabitation you may have a claim against the other. This can be particularly true if the assets are all in one person’s name. If you are the other person (who doesn’t have any assets) you may feel aggrieved by the situation and decide to make a financial claim.
Again lawyers will be involved and the legal fees could be significant
The truth is that you may be cohabiting, rather than marrying, for the very reason that you don’t want your finances to become intermingled.
If that is the case then you can make that clear in the Cohabitation Agreement. In the same way that a Pre- Nuptial Agreement sets out exactly what is to happen from a financial perspective if a married couple decide to separate, a Cohabitation Agreement states clearly what will happen if you decide to split taking away the possibility of disagreement.
The Cohabitation Agreement can also detail what happens to the moveable property, the contents of the property, in the event of a separation.
Going back to the beginning of this blog it is most likely that you would be advised to have a Cohabitation Agreement drawn up when you are buying or selling a property.
The solicitors involved in relation to the property are not best placed to advise you on a Cohabitation Agreement. Conveyancers tend to focus on the property issues but not necessarily the other issues that might affect the relationship.
For comprehensive protection and peace of mind you should consult an experienced Family lawyer who will look at all the circumstances, advise you of the potential pitfalls and draw up a comprehensive Cohabitation Agreement on your behalf.
Rooney Family Lawyers have accredited expert solicitors who specialise in Cohabitation Agreements
Phone now for a fee quote.