What is a Cohabitation Agreement?
When couples who are not married choose to live together, they may decide to enter into a living together contract. These agreements are also referred to as premarital agreements, cohabitation agreements, or marriage contracts, and serve to protect each person’s rights, property, and financial interests. A living together contract truly defines the nature of the relationship for legal purposes, and can be useful in a number of circumstances.
For example, a contract can detail the rights and responsibilities of each partner if the relationship should end. Domestic disputes are a common cause of litigation, and can result in expensive court intervention. When a couple has a legal agreement that outlines what is expected of each person, there is often no reason for going to court. A living together contract can also include requirements regarding children. More states have passed laws that strip non-married parents of parental rights over biological children . Those individuals who are raising children in a cohabitating relationship can use a contract to ensure that their rights and interests are protected.
Legal issues can also arise when one partner owns all property, but the other has contributed to the upkeep of that property. Those who need legal protection for property investments may also want to consider entering into a cohabitation contract. For example, suppose a couple purchases a home together, but when they separate only one partner is legally entitled to the house. A living together contract that names specific conditions for the sale or buyout of the other person’s share can prevent disputes and a lengthy court battle.
As more and more couples choose not to marry, it is critical for those individuals to understand their legal rights. A living together contract is an excellent way to protect those rights, as well as property investments, financial interests, and children.
Essential Elements of a Cohabitation Agreement
The following are the key components that every living together contract should include:
Property ownership: The contract should set out how property that is now co-owned or will be co-owned in the future is to be owned. Will it be joint tenants? Tenants in common? Does one party have exclusivity to certain pieces? Are there any provisions for buying a co-owner out and if so, are there guidelines?
Payment of expenses: Who will pay what? The rent or mortgage (or both)? Utilities? Groceries? Who will deal with those expenses that are shared and who bears responsibility if the other fails to pay their share. Also, be honest and careful about how money is paid back – if one person gives a loan to the other, they should not expect the money back in a manner consistent with a mortgage repayment. Unless they want to risk being treated as a lender (with all risk and expense associated with that), it is important that the parties document and reflect that in their books and records.
Responsibility for debts: If one party has taken out debts and is responsible for paying them, what happens upon cohabitation? Is the other party on a hook for those debts? What happens if one party incurs debt during their relationship – should the other party be responsible for anything that comes due after the parties have separated?
Liability for catastrophes: If one or both parties lose the ability to earn an income due to an unforeseen circumstance (a traumatic injury, disability, long-term illness, etc.) is there a provision in the contract to deal with that? If bad fortune strikes, does the contract set out how this type of eventuality will impact the sharing of household costs, property ownership and debts?
Dispute resolution: How will disputes be resolved if they fail to agree? You can always suggest binding arbitration, but only suggest if you are prepared to be a party to this type of arrangement.
How to Personalise your Cohabitation Contract Template
Whether your cohabitation is of a short term or an indefinite duration, you should tailor the pre-printed language and fill-in-the-blanks on your Living Together contract template to reflect the specific needs of your circumstances. For example, while a fully paid-up purchase of a single family dwelling might be in order for a couple planning to live together indefinitely, a rental of an apartment might be in order for a two-month cohabitation. If you do not intend to have joint ownership of real estate (or even if you do) you should determine whether one party or both parties should pay rent or mortgage. If you do plan to share the cost of housing, you need to determine how that will be accomplished. For example, will the relationship flow-through rent or mortgage payments so that everyone pays their fair share, or will they co-own the property, own jointly, or own as tenants in common? You also need to consider whether you are sharing utilities and other expenses and how that will be accomplished.
If you decide to make joint purchases of items from furniture and appliances to art work and cars, you can set out reimbursement provisions. Assume that you are sharing the expense of furnishing an apartment. One party pays for everything. You can provide that one party can demand reimbursement for half when both parties sign the receipts for the purchases. Alternatively, if you jointly purchase with receipts signed by both parties, each party is obligated to pay for and bear half of the entire expense. The alternative selection should apply to sales taxes, insurance, repair or conversion costs.
You also need to consider insurance to protect your property and potential liability. If you have a dog, you might purchase an umbrella liability policy. If you have a significant painting or piece of jewelry, you might make separate provision for specialty insurance. If your relationship does not work out, you may want to consider insurance for the value of items purchased jointly.
In every case, the key to the correct drafting is to be aware of the issues and to have a talk with your partner about them so that you are in agreement. Be flexible. No one can anticipate every contingency, so use your common sense and choose language that makes sense in your situation.
The contract is not an end point in your life, it is just the beginning.
Legal Implications
In France, previously non-binding agreements between cohabiting partners can be enforced if they are not contrary to public order, such as a contractual clause relating to a child or to a third party. As a general rule, the contract must meet the requirements of common law (art. 1101- 1134 of the French Civil Code). A contract for an unforeseeable future is null and void. For any contracts made between parties not related by marriage, a notary may be used if desired. While using a notary is not required, some find it reassuring to use a family lawyer or notary to draft the contract. Notary fees are around EUR300-600 (no VAT is payable). Note that some provinces have special provisions in respect of registration fees. The contract may be presented in English or in a foreign language but a French version must be provided afterwards. It should also be translated into any other language as required. Consultation with a lawyer is advisable so that your relationship may be best protected.
Advantages of a Cohabitation Agreement
A well-drafted living together contract can bring much-needed clarity and certainty to individuals who have chosen to live together. For example, a court is not able to make an order to adjust financial positions where unmarried couples separate, though it is possible in some limited circumstances for courts to make property adjustment orders. However, the outcome of a case at court can be difficult to predict where finances are concerned. The parties may be emotionally attached to something owned in the name of another when they separate. A living together contract may set out clear rules in a form agreed by both parties as to what is to happen if the relationship ends . The consequence of not having a living together contract in place would be that the property and financial assets would be divided in accordance with law, which may not fairly reflect what the parties would have wanted.
When putting together a living together contract, one might wish to consider the following clauses: The court is likely to uphold an agreement if the contact has been entered into with full understanding. If one party were to claim that they had not been properly advised or did not understand there may be grounds to set aside the agreement. It is always preferable to record all agreements in writing and for both parties to seek the advice of an independent solicitor. Ideally the contract should be signed at least seven days after the parties have received the relevant independent legal advice.
Where to Obtain a Cohabitation Agreement Template
Like most legal documents, there are both free and paid self-service templates available online, or you can work with an attorney to draft a contract that meets your specific needs and provides more security and protection. If you choose to use an online template service, often the best ones will be through legal websites that have the ability to create customized agreements and forms. The advantage of these types of template services is that they are accurate and up to date. However, they often come with a fee for customization. A reputable attorney is able to provide you with these tools as well; the advantage here is that you also have immediate access to their experience and expertise in contract drafting.
Researching the type of site supporting your contract is essential to making the right decision for you and your partner. Look for the following attributes for any website offering living together contract templates: Most small software websites will not be capable of keeping contract templates up to date, and many simply draw on old internet posts on the subject. Even if you are paying for a template, and even if the contract looks and feels right to you, beware of those companies that offer no better than a cut and paste solution. One exception is LawDepot.com, which specializes in providing self-service and customizable easy-to-understand contract templates. Their templates are very high quality, but do come with a charge. Other sites include SimpleContracts.co and TemplateLab.com. Simply do an internet search on "living together contract template" to see some of the broad options available to you. The bottom line is that while there are options available to you if you want to go the DIY route. Most experts strongly recommend working with a lawyer to review and customize your cohabitation contract to ensure it’s drafted correctly to your personal needs.
Revising and Amending Your Cohabitation Agreement
As your relationship and circumstances evolve over time, it is crucial to have the flexibility to amend or update your living together contract. Regular reviews of your contract are essential to ensure that it remains relevant to your current situation, including any major changes in your professional life or the birth of children. Personal circumstances can change for many reasons, including changes in health, circumstance, costs of living or employment, the list goes on.
The language of the contract can also become outdated. For example, some relationships began several decades ago may refer to "cohabitation" or "cohabitees" , rather than the modern terminology "common law spouses" or "common law partners". Terminology is continually adapting and changing, and the terms used within your contract and the related legal consequences may have changed as well.
The process of updating your contract may involve discussing the existing agreement, determining whether amendments need to be made, and then documenting any changes in a written agreement. Having a written agreement signed by both parties is crucial because an oral amendment of the contract that directly contradicts the written contract is not helpful in the event of litigation.