Couples who are moving in together may wish to prevent a dispute arising in the future in the event of separation by taking pre-emptive measures, such as entering a cohabitation agreement. One reason for this is because it is possible for an individual to acquire a beneficial interest in a property even if they are not named as a ‘legal’ owner at the Land Registry. Another reason may be if one party is paying a larger deposit than the other and they would like to protect this money in the event of separation.
A cohabitation agreement sets out how the parties will divide their property and other assets such as furniture and vehicles if they were to separate in the future. This is similar to a pre-nuptial agreement for engaged couples who are about to embark on marriage.
Whilst a cohabitation agreement is not a legally binding document, it does invite the court to uphold the agreement reached if it is drawn up correctly by a solicitor and it provides more legal security than no agreement at all.
In addition to a cohabitation agreement, a Declaration of Trust may be obtained. This document is made at the time of buying a property. It sets out the respective shares of the property and what would happen in various eventualities ie. if the property was sold or if one owner wishes to buy out the other in the future.
