Creating a Cohabitation Agreement

iStock_000020775420_SmallWhen a couple chooses to live together without getting married, there are certain steps they should take to help protect their property. A cohabitation agreement is a legal document that covers individual responsibilities for household expenses, division of property in case of separation, and other agree-upon terms of your living-together arrangement. In the eyes of the law, the couple is still seen as separate individuals who have little to no rights if the relationship ends. Couples should be aware of certain issues regarding shared property to avoid future conflicts.

First of all, couples should decide how they will own the property before they purchase anything together. Before buying any large assets, such as a house, a couple should decide whether they own the property as joint tenants or tenants-in-common, in order to protect their rights in case one partner dies or the relationship ends. If the couple chooses to own the property as joint tenants, then they will share the ownership equally. Joint tenants own equal interest in their jointly owned property. If one of the joint tenants dies, then under the right of survivorship the remained owner (or owners) automatically receive the deceased member’s share.

If the couple decides to own their property as tenants-in-common, then each member owns an individual share in the property. The couple decides themselves the percentage of each share. The couple could decide that one party owns 25 percent of the share, in which case that party would contribute 25 percent to the purchasing price. It is important to note that, in this type of tenancy, a co-owner does not automatically receive the other co-owner’s share if that party dies. If a co-owner dies, their share becomes part of their estate and it will be distributed as specified in their will.

It is also important for a couple to choose how they jointly own a property in case their relationship ends. If they won a large asset, such as a house, as joint tenants or as tenants-in-common, then the property could be divided equally in case of their separation. If they do not choose a way to own the property together, and instead put the property under only one name, then there could be conflict when deciding how to divide the property.

If the property is under one name then it will remain that party’s property when the relationship ends, unless the other party proves that there was a common intention that they would share the property. To prove a common intention when no such agreement was made in writing, there must be proof that both parties contributed when purchasing the property, maintenance, and mortgage payments.

When creating your own cohabitation agreement, try looking at sample cohabitation agreements online to give you a general idea of how a cohabitation agreement might look. Determine what you would like to include in your agreement, and have both parties sign and receive their own copy. You may also want to have the signatures notarized. Though it is not legally required, having the agreement notarized may prevent any future disputes over the validity of a person’s signature on the contract.