Cohabitation: What to Expect

Cohabitation is increasingly common, with many couples choosing to live together before, or instead of, “tying the knot”. Many people take the decision to cohabit without realising the legal significance of this step.

There are still some common misconceptions about the legal significance of cohabiting. Some people think that cohabitants have no legal rights and that only married couples benefit from such rights. Others think that once you have cohabited for a certain number of years, then you are “common law married” and have the same rights as married couples. Neither is correct and each is an urban myth!

So, if marriage is not, or not yet, for you, what do you need to know in the event of a breakdown of your relationship?

The rights of cohabiting couples

The rights of cohabiting couples are very different to those of married couples.

In a marriage, the net matrimonial property (all assets and liabilities held at separation that were acquired by either party during the marriage other than by gift or inheritance) is valued at the date of separation and the total net matrimonial property should be shared fairly (usually equally) between the spouses. Spouses have automatic claims to share in the value of matrimonial assets held in the other party’s sole name.

In contrast, a successful cohabitation claim will require you to prove that you have suffered an economic disadvantage during the relationship in the interests of your partner or child, and that your partner has been economically advantaged by your contributions. A cohabitant does not acquire any rights to the property or assets owned by the other partner. Most couples will combine their finances and will not keep a detailed accounting of their finances throughout their relationship, which makes a cohabitation claim difficult to quantify. The courts tend to take a broad-brush approach to cohabitation cases.

A cohabitation claim must be resolved, or a court action raised, within 12 months from the date of separation. If a court action is not raised within that time frame, any potential claim is time barred. This is in stark contrast to married couples who have no time limit to make a claim following separation provided the claim is made before divorce. This strict time limit can lead to people being caught out. Therefore, legal advice should be obtained early.

As the law presently stands, a cohabitation claim can only be for a capital sum. Just because you have lived in your partner’s house and contributed towards the household bills for years doesn’t mean that you automatically have a right to a share in it. Even if the property is owned jointly, if you cannot agree that one will be able to buy the other out, the court cannot order that a property be transferred into a cohabitant’s sole name. The only option, in the absence of agreement, is to sell the property. Again, this is in stark contrast to married couples who can seek an order for the transfer of a property title into their name.

Cohabitation agreements

Most couples will benefit from entering a cohabitation agreement before they take the step of moving in together but they can also be entered into after the cohabitation has commenced, if necessary.

Entering a cohabitation agreement can provide protection and clarity. A cohabitation agreement can set out, for example, who is to pay the mortgage and the bills, and what sum, if any, will be paid to each party in the event of separation and how that will be calculated. It can regulate different contributions towards deposits or renovations to a property. It also allows the parties to agree that the property could be transferred to one or other of them in the event of separation, rather than the only option being sale.

Having a cohabitation agreement in place can save time, stress and considerable expense in the event of a relationship breakdown in the future.

Please note: The law on cohabitation is currently under review in Scotland and some significant changes are expected in future. The information set out above reflects the legal position as at 15 March 2023.