We recommend that cohabiting couples, or persons who intend to live together, enter into a Cohabitation Agreement to regulate various aspects of their relationship with each other.
Cohabitees should consider their own circumstances and the ownership of assets, such as a house, particularly where one person is contributing all, or a larger proportion of, any deposit for the purchase of the property.
The terms of the Agreement are open for negotiation between couples, and they are free to make such regulation of their affairs as they consider appropriate for themselves.
A Cohabitation Agreement can include the following provisions
- What is to happen to any jointly owned heritable property in the event that cohabitation ends in separation; for example is one party entitled to have the property transferred to them in return for a capital payment or is the property simply to be marketed for sale and the proceeds divided?
- What is to happen to any jointly owned heritable property in the even that cohabitation ends with death; and
- What is to happen to any moveable property owned jointly or separately in the event that cohabitation ends otherwise than by death.
A Cohabitation Agreement provides cost effective certainty surrounding what will happen in the unlikely event of a separation or death in intestacy. In the event that there is no Cohabitation Agreement in place, and a disagreement arises, litigation is the most likely alternative.
The Family Law (Scotland) Act 2006 sets out the rights which Cohabitants have for financial provision at the end of their relationship whether that be as a result of separation or death. Cohabitants can seek capital payments based on economic advantage or disadvantage as a result of their relationship and for a claim to be made in respect of the financial burden of looking after a child of the relationship. Such a claim must be made within 12 months of separation. Claims made following the death of an intestate cohabitant must be raised within 6 months of the date of death.