Cohabitation

When you move in with your partner and become cohabitees, the Cohabitees Act governs your financial relationship. For some people, the provisions of the Cohabitees Act may be impractical and they may want to agree on alternative rules, through a so called cohabitation agreement. For others, the Cohabitees Act may not provide sufficient protection and they may want to further regulate their relationship through for example a will. Below you can read more about the different alternatives that are available for you as cohabitees when you regulate your financial relationship.

Cohabitation agreement

A cohabitation agreement is necessary if you as cohabitees do not want the rules of the Cohabitees Act to apply, if the cohabitation relationship ends in case of a separation or death. According to the Cohabitees Act all cohabitation property (i.e. the jointly purchased home, the common household goods and other goods that you have bought for common use to be used in your home) will be included in the division of property and will be divided equally between the parties. In case one of the cohabitees has paid all of, or the larger part of the common home, or is buying most of the common household goods, this division may be unfair.

A cohabitation agreement excludes the application of the Cohabitees Act and the cohabitees can decide that all, or some of the common property shall be excluded from the division of property. In order to be valid, the cohabitation agreement needs to be in writing and be signed by both parties. A cohabitation agreement does not have to be registered with any authority. 

Co-ownership agreement

Something you need to consider when entering into a cohabitation agreement is that, in case the cohabitation relationship comes to an end, each cohabitee keeps the property for which he or she is registered as the owner. If you buy something jointly and you want to make sure that the value of this property will be divided equally, it may be helpful to enter into a co-ownership agreement.

Even if you do not have a cohabitation agreement the problem described above is relevant in relation to property not covered by the Cohabitees Act, such as a car or a summer house, i.e. property not included in the cohabitation property. Without a co-ownership agreement the risk is that if one cohabitee is registered as the owner of for example the newly acquired summer house or car, the other cohabitee will not have any right to this property in case of separation or death, even if the latter has paid half of the property. An alternative is to make sure that both parties are formally registered as owners.

Promissory note

If you have jointly purchased the common home but one of the cohabitees has payed more for the property, it can be necessary to draw up a promissory note. In case of separation you can then ensure that each person will be given a value that corresponds with the value that he or she contributed when buying the property.

Joint will

A joint will between cohabitees is something very different from a cohabitation agreement. As described above, a cohabitation agreement excludes the application of the Cohabitees Act in case of division of property. A joint will, on the other hand, ensures that the cohabitees get the right to inherit each other. The law does not provide for inheritance between cohabitees. By making a joint will, the cohabitees can ensure that the surviving cohabite inherits all the deceased partner’s property, or part of the property, for example the joint home. 

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