Cohabitation agreement
5 reasons why you should consider a cohabitation agreement. If the topic is strained at the start, it will not improve if it is broken.
Becoming cohabitants is a big and comprehensive decision that involves a number of changes for both parties. This can be regulated with a cohabitation agreement.
For the vast majority of people, this is a new chapter in their lives and it is both exciting and challenging to step into an everyday life where you have to relate to each other in a different, and more binding, way. Although most people are in a state of euphoria, it is also important to take a step back and think thoroughly about what this actually entails.
Here you can download an example of a cohabitation agreement.
Going from one to two separate households involves a number of compromises, choices and positions. Certain skills are required in relation to both communication and awareness of values. In addition, there are a number of legal aspects that not everyone is fully aware of. Should one buy a home together, or should one move in with the other? If you buy a home together, how much equity should each individual contribute, and how do you do it if one has significantly more value than the other? What if one is a student and cannot contribute to the financial community for a period of time? Who should own what of the interior and how do you do it in the event of a breach?
These are issues that many refuse to raise. Partly because they are uncomfortable and partly because you don’t think about it. Many also find it difficult to talk about finances and discussions around the topic can be a conflict bomb. But it might be a good idea to take an acid test of the relationship.
Here are 5 reasons why you should consider a cohabitation agreement
1. The cohabitation itself
In the actual decision to move in together, the parties should have a conscious relationship with ownership and finances. Clarifying who will be left with the home, car and grandmother’s painting is about creating an overview and order. A cohabitation should withstand this and the topic can easily act as an acid test on the relationship itself. If you are cohabitants without children, each own your own home and have separate finances, there is little need for a cohabitation contract/cohabitation agreement.
2. Housing
Housing is one of the largest and most important financial investments the parties make in a cohabitation. Many already own a home and want the new partner to buy into the home, while others want to enter the housing market and buy together . Often the parties do not have the same amount of equity and there can also be large differences in income.
Points to think about are: Does the person moving into the property want to invest or does the person in question have to pay rent? If so, how much? Should both parties own the same amount of the home, or should it be distributed according to who has contributed the most equity?
If the parties have children, this will also mean the need for a number of clarifications.
3. Movable property
If the parties bring furniture and fixtures into the cohabitation relationship, it may be a good idea to make a list of who owns what and add this to the cohabitation agreement. It is not uncommon to forget such things in the event of a break-up, and then a clarifying list will dampen any emerging conflict. Breakups are often so emotionally demanding from before, that ambiguities and disagreements of various kinds disappear like fuel on the fire. If you buy something jointly, it should also be stated whether you own it together or not. One should be able to add and remove things as the objects are obtained.
Suddenly the pots from IKEA or the Christmas decorations become arenas for principled warfare, and you should try to avoid that.
4. Provider
Occasionally one of the parties is supported by the other. This may be due to one being a student or staying at home. The parties should clarify between themselves whether the person who bears the biggest financial obligation should have compensation for having paid off the mortgage, bought food and provided for the other over a longer period. If both own the home with 50% each, it may feel unreasonable that an equal settlement should be made in the event of a breach. It should then be agreed whether one’s minimal contribution should trigger any increased rights for the other, either in the form of a larger share in the home, claims for compensation or the like.
There are several judgments from the Supreme Court where exactly this has been the subject. The Supreme Court says quite clearly that as long as nothing has been agreed, it must be assumed that cohabitants contribute to the community without there being any question of equalizing any remaining balance when the cohabitation ends. It takes an enormous amount. But if the parties have anchored something about this in an agreement, this will weigh heavily.
5 It’s easy to set up an appointment
There are no formal requirements regarding the creation of a cohabitation agreement. No witnesses are needed and the document can be stored both in the archive folder and on the PC. It may be a good idea to consult with a financial adviser and or lawyer/lawyer to be on the safe side. Especially when it comes to housing, children and other more complicated financial matters. Most lawyers have a fixed price for such assignments and it may be worth the investment to get good advice so that you are not left with unclear points of agreement that cannot be realized.
You can also easily set up such an agreement yourself and there are countless templates online.
Here you can download an example of a cohabitation agreement.