Cohabitation Agreements are as Much Business, as they are Personal Documents

When you move in with, or buy property with another person, you tend to think of it as a personal matter. Whether moving in with significant others or domestic partners or friends, our mind doesn’t see these events as business events needing business documents to protect ourselves.

But outside of marriage, if something goes sour with the relationship, it will be the civil business courts that will adjudicate the rights of the parties–not the family courts. And that means that the documents that you may need to protect you, are business documents.

The Cohabitation Agreement

One of the most important of those documents is the cohabitation agreement. As the name suggests, the cohabitation agreement spells out the rights and duties of the people moving in together or living together, as well as detailing what will happen, should the relationship go sour.

The agreement can be used when two people are buying property together and moving in, or when one person is moving into property already owned by the other person.

It is surprising how few people see the need for such an agreement, when they move in together. But people who buy property together and move in often put down or borrow tens if not hundreds of thousands of dollars. And they’re living in a property that hopefully, throughout time, could see an appreciation of that same amount of money.

Note as well that Florida does not recognize common law marriages. So, no matter how long you and your unmarried partner are together, unless there is ever a marriage–from a financial standpoint, you are business partners when it comes to property of any kind.

What Should Cohabitation Agreements Cover?

Cohabitation agreements can cover any number of scenarios including

• Who will pay what bills and expenses in the home
• What happens if the parties are no longer together or want to cohabitate? This might include a sale of the property, and detail who gets what from the proceeds of the sale, as well as how or at what price the property would be sold.
• While awaiting sale, the agreement may also say who gets to actually live in, or possess the property.
• The agreement may limit the extent to which one person or the other, can encumber the property with a lien or mortgage
• The agreement can even detail any financial support one person might provide to the other, and for how long, should the parties move out

Family and Estate Law

Often cohabitation agreements do follow some of the same principles used in family law, such as in a prenuptial agreement–but they do not have to. And in more complex situations involving larger values, your cohabitation agreement should be thought of as a business contract, as well as a domestic document.

Additionally, remember that your cohabitation agreement will likely supersede anything to the contrary that you have already put in an estate plan, such as a will or a trust. That means that if you execute a cohabitation agreement you’ll want to review those estate documents.

Business matters can be personal matters as well. Let us help. Call our West Palm Beach commercial litigation attorneys at Pike & Lustig for help.

Source:

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