Cohabitees and Cohabitation Agreements
If you are thinking of moving in together with your partner, a Cohabitation Agreement might be a smart idea.
Nowadays, a greater number of people than ever before are choosing to live together without getting married.
Since 2006, the Scottish legal system has offered a limited degree of protection for these couples. But that protection does not put cohabiting couples on the same legal footing as married couples – far from it.
What is cohabitation?
Cohabitation is, broadly speaking, where two people are (or were) living together as if they were husband and wife (or civil partners).
The Family Law (Scotland) Act 2006 (“the 2006 Act”) sets out a legal test to determine whether or not a couple is (or was) cohabiting. Not every couple will meet the criteria.
It will depend on a number of factors, such as:
- the length of time you have been living together, and
- whether you have children together.
What rights do I have as a cohabitant / cohabitee?
Rights on separation
In the event of your relationship breaking down, you may be able to apply to the Court for an order for payment of a capital sum (where one party has derived economic advantage and the other party has suffered economic disadvantage) and/or a further sum of money to reflect the additional burden of having to care for a child of the relationship or a child who has been accepted as a child of the family.
The Court has a wide discretion, but it cannot accept an application if you have been separated for over one year by the time you make the application. The time limit can only be beaten if a court action is raised and served on your former partner within one year of separation. It is not enough to consult a solicitor within one year of separation, or simply intimate to the other party your intention to claim.
Unlike married couples, when they separate, cohabiting couples cannot ask the Court to make a an order to transfer ownership of the house they shared together.
So, whereas a wife could ask the Court to transfer to her a house owned solely by her husband, she could not do that if the parties were merely cohabiting.
Even so, the Matrimonial Homes (Family Protection) (Scotland) Act 1981 does offer a small degree of protection in these circumstances: the person who does not own the house (known as the “non-entitled cohabitant”) can apply to the Court to give them occupancy rights for a further 6 months.
Rights on death
The 2006 Act also gives a cohabitant the right to make a claim against the intestate estate of their deceased partner. A person who dies “intestate” is someone who dies without leaving a will.
Claims of this nature must be made within 6 months of the date of death. What you need to do “within 6 months” is along the same lines as for the one-year period for claims on separation, discussed above.
Summary of rights
In short, whilst cohabitants have greater rights than ever before, the law in this area is still developing. Unlike married couples / civil partners, where cohabitants separate, there is little certainty as to what will happen regarding the sort of financial settlement that will be reached.
That is why more and more couples are entering into “cohabitation agreements”.
What is a cohabitation agreement?
A cohabitation agreement is a contract entered into before a couple start living together.
If you are considering moving in together, you might want to consider entering into one of these agreements beforehand. This is especially so if:
- Your partner is moving into a property you already own;
- You’re buying a property together to and one of you is contributing more than the other towards the deposit; or
- You have a children together.
The agreement can be tailored to meet your particular needs and circumstances.
In most cases, they are used to set out how you would divide your assets in the event of your relationship breaking down.
They are also commonly used to set out how you and your partner intend to manage your day-to-day finances (e.g. how you will pay your mortgage/ rent and other bills and manage your bank accounts) and bigger purchases, such as cars.
In Scotland, properly-prepared agreements are enforceable and legally binding.
How we can help
If you have any questions about issues to do with cohabitees and cohabitation agreements, please get in touch with us. We are happy to help and all initial enquiries are free of charge and without obligation.