Co-habitation now may lead to legal obligations as the newly enacted Civil Partnership and Certain Rights and Obligations of Cohabitants Act 2010 (“the Act”), provides protections for cohabiting couples (same sex or opposite sex) including a redress scheme for financially dependent long term cohabitants on the ending of a relationship, whether by break-up or death.
While civil partners can only be same sex couples, a co-habitant is defined in the Act as ‘one of 2 adults of the same or opposite sex’. While there are no automatic rights of inhertitance for cohabitants under the Act, qualified cohabitants are entitled after the death of a cohabitant (subject to time limitations) to apply for an order for provision out of the net estate. A qualified cohabitant is defined as ‘an adult who was in a relationship of cohabitation with another adult’ for a period of 2 years or more where there are the parents of dependant children (otherwise the period is 5 years).
Cohabitants cannot apply for an order of the Court where the relationship concerned ended two years or more before the death of the deceased unless the applicant was in receipt of periodical payments from the deceased either under an order made under the Act or pursuant to a cohabitants agreement or unless proceedings under the Act for financial redress were pending at the time of the death.
The Act also provides for the recognition of cohabitant agreements, which regulate the shared financial affairs of cohabiting couples. The Act establishes an ‘opt out’ scheme for cohabitants, which are formal legal agreements they can enter into during their lifetimes. This is designed to address the risk that people can simply ‘drift into’ legal obligations. It gives legal recognition to agreements enabling cohabitants to regulate their joint financial and property affairs. To enter into an ‘opt out’ Agreement, both parties must use separate solicitors to advise on the terms of the opt-out Agreement and the terms must be fair..