> >

How cohabitation agreement mutual property ownership

Due to exorbitant house prices in the UK, real estate agents have come up with various schemes to enable people to own property. One of these is the cohabitation agreement. Cohabitation agreement allows two individuals who are not married to share ownership of property. It is a legally binding agreement and is recognised law. Its formation and termination are subject to adherence to a legally binding contract. Cohabitation allows couples to pool together their resources in buying a home. The couples may also use this agreement to take advantage of real estate incentives that are put forward by the government, such as Help to Buy Isa. The couples must come up with an agreement regarding the use of the property and property dissolution. The agreement gives each couple a peace of mind during their stay in the property since they will not be living in fear of what the other partner might do. The agreement must be clearly spelt out and duly signed by each of the couples. Each couple is entitled to a copy of the document. It is advisable to keep this document in a lawyer’s office or any other safe place. The document will come in handy during the dissolution of the contract. Failure to produce the contract or cohabitation agreement may make a legal intervention in a dispute between the couple difficult or even impossible to solve.

A cohabitation agreement need not be complicated and full of legal jargons. It can be drawn in a simple language that is clear to the parties involved both in the contract drafting and during the dissolution of the contract. Even though the agreement is simple, it should be as specific as possible. Ambiguity may cause interpretation difficulties during conflict resolution. Factors to consider when drawing the contract include:

  • The manner in which expenses will be shared. The couple may share expenses equally, or according to each individual’s financial capabilities. They may also pool their funds in a joint account and use the account to pay for common expenses.
  • How properties acquired before and after the relationship are to be shared.
  • How to go about dispute resolution
  • What is to be done in the case of death of one of one of the couple.

There are additional documents that make cohabitation contracts easy to manage. These include wills, durable power of attorney, and joint tenancy with a right of survivorship. Wills are quite common documents of inheritance. They outline how a deceased person’s property is to be shared. Application of the concept of wills in cohabitation agreement is similar to how it is used everywhere else. A will in a cohabitation agreement states the name and the rights of a person that is entitled to continue cohabitation agreement in the case of death of a pre-existing owner of a cohabited property.

< previous Possible effect of Brexit on conveyancing

How to go about renting out your home next >