Cohabitation Agreements: Why Unmarried Couples Buying Property Together Need One

The myth that catches people out

"We've lived together for years, so we have the same rights as if we were married" is one of the most persistent and costly misunderstandings in UK family and property law. There is no legal concept of "common law marriage" in England and Wales. Living together, sharing finances, even having children together, creates no automatic legal entitlement to a share of a partner's property, pension, or income if the relationship ends — regardless of how long the relationship lasted.

This matters enormously for unmarried couples buying a home together, or moving into a property one partner already owns.

What a cohabitation agreement actually covers

A cohabitation agreement (sometimes called a living together agreement) is a bespoke legal document that can address:

• Property ownership — who owns what share, particularly if contributions to the deposit or mortgage payments are unequal.
• Contributions to household costs — how bills, mortgage payments, and renovation costs are split, and what happens if that changes.
• What happens on separation — how the property is valued, whether one partner has the right to buy the other out, and over what timescale.
• Other assets — savings, joint accounts, and sometimes provisions relating to debts.

Cohabitation agreement vs declaration of trust

These two documents are often confused, but serve related, complementary purposes:

Many solicitors recommend both together when an unmarried couple buys a property with unequal financial contributions, since the declaration of trust nails down the exact ownership split while the cohabitation agreement addresses the wider financial relationship.

Why unequal contributions make this especially important

It's increasingly common for one partner to contribute a larger deposit — for example, from savings, a gift from family, or the proceeds of a previous property sale. Without a formal record of how this translates into ownership shares, a property bought with an unequal deposit can default to being treated as owned equally, particularly if it's registered in joint names without any accompanying declaration of trust — potentially giving the partner who contributed less a windfall share if the relationship ends and the matter goes to court.

A declaration of trust prepared at the point of purchase, reflecting the actual contributions and any agreement about how future costs will be split, substantially reduces this risk and the scope for costly disputes later.

What happens without any agreement

If an unmarried couple separates without a cohabitation agreement or declaration of trust, and can't agree on how to divide the property, the dispute typically falls to be resolved under trust law — specifically, whether a non-legal-owner partner can establish a "beneficial interest" through financial contributions, promises made, or other factors (sometimes argued through concepts like resulting or constructive trusts, and "proprietary estoppel"). This process is:

• Far less predictable than the financial settlement process that applies to divorcing spouses or dissolving civil partners.
• Potentially expensive, often requiring specialist family/property litigation.
• Not guaranteed to reflect a fair outcome in the way many people assume — a partner who has made significant non-financial contributions (for example, giving up work to raise children) has historically had a much weaker claim in this context than a divorcing spouse would.

Inheritance Tax and wills — a separate but related gap

Even with a well-drafted cohabitation agreement, unmarried partners have no automatic Inheritance Tax spousal exemption — assets passing to an unmarried partner on death can be subject to Inheritance Tax in a way that assets passing between married spouses or civil partners generally are not. This makes having an up-to-date will especially important for unmarried couples, since without one the intestacy rules (which generally don't recognise an unmarried partner at all) would determine who inherits — potentially excluding a long-term partner entirely in favour of the deceased's family members.

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Practical steps for unmarried couples buying together

1. Get independent legal advice each, ideally from different solicitors, before finalising a cohabitation agreement or declaration of trust — this significantly strengthens the document's enforceability.
2. Record contributions accurately at the point of purchase, particularly if a deposit is unequal or comes partly from a gift or inheritance.
3. Decide and record what happens if you split up — whether one partner can buy the other out, over what timeframe, and how the property would be valued.
4. Write a will — don't rely on intestacy rules, which generally don't provide for unmarried partners at all.
5. Review the agreement periodically, especially after having children, a significant change in financial contributions, or major property improvements funded by one partner.

Marriage and civil partnership come with a substantial, automatic legal framework covering property, pensions and inheritance on separation or death. Cohabiting couples have none of that by default — a cohabitation agreement, declaration of trust, and up-to-date will are the closest practical substitute, and are worth the modest upfront legal cost relative to the risk of an unresolved dispute later.