The need for cohabitation law reform

Cohabiting - living together in a romantic relationship without being married – has become increasingly common, but it comes with a number of potential pitfalls. These challenges can be emotional, legal, financial and relational. Cohabitation is becoming more universally acceptable and yet, cohabitees have very little legal protection. The number of cohabiting couples has increased from around 1.5 million in 1996 to now over 3.6 million.

Family lawyers have long called for Family Law reform to better protect unmarried couples and the news that Labour pledged in its 2024 manifesto to strengthen the rights and protections of individuals in cohabiting relationships has been welcomed in the Family Law community.

Contrary to public perception, cohabitees will not be afforded the same financial rights as married couple irrespective of how long they have lived together, and it is a myth that cohabiting couples gain equal rights to those in a marriage as they are “common law husband and wife”. Unlike marriage, cohabiting partners typically do not have legal rights to each other’s property or assets.

There’s no formal legal process like divorce to help divide assets or resolve disputes, which can often lead to messy breakups. When cohabiting couples separate, financial and property disputes often follow and can result in highly contested Court proceedings. Whilst we await the public consultation with great interest, there are things that cohabiting couples can do to protect themselves legally.

Cohabitation Agreements: these agreements are effective in removing some of the areas of doubt or misunderstanding in a financial relationship and can mitigate or even eliminate potential claims on separation by clearly defining the rights and responsibilities of the cohabitees. Here are the key benefits;

• Legal clarity – the agreements clearly define who owns what and what each party’s responsibilities are in terms of how the rent/mortgage, bills and other living costs will be divided.
• Avoids common law misunderstandings – many people believe that living together for a certain period gives you the same rights as marriage (“common law marriage”). A Cohabitation Agreement prevents such misconceptions by setting your own terms.
• Reduces conflict – having a written agreement helps avoid arguments by setting expectations clearly in advance, especially about money, housing and personal belongings. The agreements can be tailored to any specific situation.

Whilst Cohabitation Agreements are not automatically legally binding in the UK, Courts are increasingly willing to uphold them if certain conditions are met. For example, both parties must enter the agreement freely, fully understand its implications, and provide honest disclosure of their finances. The agreement should also be fair and reasonable.
Declarations of Trust: A Declaration of Trust is a legal document that is drawn up when people buy property together and they wish to reflect the legal arrangements under which they will own, fund and sell property, and, how the sale proceeds will be divided. The key benefit for cohabiting couples is that when unmarried people buy a property together, it can clearly set out their respective contributions. It is not easy to change or seek to overturn a Declaration of Trust and so it is important to seek legal advice before entering into this type of agreement.
Whilst you can enter into a Cohabitation Agreement or Declaration of Trust at any point in your relationship, it is sensible to consider doing so prior to cohabiting to avoid the above pitfalls.

If you would like to discuss a Cohabitation Agreement or Declaration of Trust with any of our Family team, please contact Emma Rothstein or Chloe Langdon on 020 8949 9500.