With lockdown bringing a focus on people's living arrangements, this year has seen more couples take the next step to move in together. A lot of people, in doing so, are perhaps unaware that this may have legal implications for them that need to be considered. Some think that there are automatic rights that apply to them as they are in a “common law marriage”, and are unaware that cohabitation rights need to be claimed. Equally, others may not know of these potential claims and need the position to be regulated (for example, to protect a deposit to a property or other interests).
What do we mean by cohabitation?
Cohabitation is the legal term applied to unmarried partners living together in a relationship as if they are married, but haven’t gone through this ceremony. As a starting point, the rights are not automatic and must either be negotiated or pursued in court following separation. There is a strict timescale for doing this – one year after the date of separation. There is no maximum or minimum time for the relationship to have endured for these rules to apply; as long as the relationship is a cohabitation, then this law applies.
The main right is the ability to claim a capital sum from one cohabitant to the other in certain circumstances on separation. The capital sum is viewed as a form of compensation to take into account any financial imbalance, rather than equal division of all the property that has been acquired during the period of the relationship (as is the starting point in divorce cases). Each case depends on its own circumstances. Financial provision, for example what is to happen with a house, bank accounts, or child arrangements can be discussed directly or through solicitor discussions, mediation or collaboration where you can reach your own agreement. Where this is not possible, in a court scenario, any award would be down to the discretion of a Sheriff or Judge. Here, a balancing exercise takes place, looking at the circumstances where there has been financial advantage to one party in the relationship, against financial disadvantage between the couple. As this is so wide ranging, technically speaking, everything is capable of being scrutinised. Whilst claims such as pension share or property transfers cannot be made in cohabitation cases, this does not mean those assets escape scrutiny. Their values may be requested or considered to work out the value of a capital sum payment due from one person to the other. Also, if a capital sum award is granted, it may mean one person has to sell property or commercial assets to meet a cohabitation claim.
What are the benefits of cohabitation?
The benefit of Scottish law is that cohabitants have rights available to them upon separation to a financial claim, which is not possible in other jurisdictions. However, there remains a lack of awareness of those rights, or even the time limit to obtain those rights. This means that sadly there remain people who are entirely unaware of these options being available to them, or by the time they realise their options, the one-year time limit is up. Conversely, there are those who were also unaware of potential rights and are faced with litigation and lengthy negotiations in trying to agree any financial claims upon separation. The law remains uncertain as to exactly what to expect in these cases and much financial information needs to be produced.
There is therefore a real benefit in entering into a cohabitation agreement when moving in or buying a property with a partner to cater for future financial claims and provide much needed certainty. This can set out ongoing arrangements on who will pay the bills and mortgage, regulate who has paid what in terms of a deposit (and how this is to be returned in the event of separation or sale), specify whether cohabitation rights should or shouldn’t apply in the event of separation, and cover financial support and practical care arrangements for any children of the relationship.
How can we help?
If you have had a change of living arrangements before, during or after lockdown, it is worth a chat with a member of our specialist Family Law team to see if any of these considerations are relevant to your circumstances.