Getting left out of life together: Cohabitants who split up may regret not having a contract to protect their property rights

COUPLES who live together without marrying should draw up cohabitation contracts to avoid costly battles about money and property.

According to a recent report by Justice, the law reform group, cohabitants need a contract to protect their rights.

The legal rights of cohabiting couples are pathetically inadequate. A couple might regard their home and assets as jointly and equally owned, but the law often has other ideas.

Cohabitants could end up with a much poorer financial deal compared to their married counterparts. If a cohabiting couple splits up, neither party can claim maintenance from the other.

Cohabitants also get no rights in the property merely by living together, even though they may have been a couple for very many years.

Jill Bowler, a partner in the solicitors Brindley Twist Tafft and James, specialises in cohabitation advice.

She said: 'If the relationship ends, a woman will have no automatic right to stay in the home with the children, unless she is able to show the property is hers and remains hers because she alone financed its purchase, or that she financed part of the purchase and is entitled to a share.

'Caring for the home and family, helping to run the business, sacrificing a career: none of these make any difference to property rights.'

The fact that a cohabitant spends thousands of pounds on carpets, curtains or furniture, pays for holidays or all the grocery bills, makes an occasional mortgage payment or helps with odd jobs around the house is totally irrelevant, according to property law.

Unmarried couples are also not automatically entitled to inherit their partner's estate on death. If there is no will, the cohabitant gets nothing.

The financial drawbacks of cohabitation are huge. But there is an understandable reluctance by cohabitants to enter into a cohabitation contract. However, it is sensible to have a written agreement which defines the financial relationship the parties have with each other. You should go and see a solicitor to make sure your individual interests are protected.

Cohabitation contracts are standard, so a solicitor should not sting you with a huge bill. An agreement can be made at any time, but buying a home together is the usual spur to put something in writing.

The agreement can spell out how much money each of you contributed to the purchase, what share you have in the property, and what happens if you decide to separate.

It can also deal with property you have bought before or during your relationship.

You should put in a clause about who owns what among your existing possessions, how you are going to pay for new ones, and how to divide your possessions if you split up.

In addition, you can provide for who pays the mortgage and the bills, and how the bank accounts will work.

Cohabiting couples frequently forget to provide life insurance for each other and to sort out suitable pension provision. The agreement can cover both financial aspects.

Finally, all cohabiting couples should make a will. A useful leaflet, Living Together, produced by Justice, will shortly be available from solicitors and Citizens Advice Bureaux.

Andy Beal and Barbara Charnley have lived together for five years. They have a 10- month-old daughter, Tilly. Barbara is the breadwinner and Andy contributes to the relationship in a non-financial way.

Ms Charnley owns The Dining Room, a successful restaurant in Hersham, Surrey, which is the family's sole source of income. She is also the owner of their home and pays the mortgage. Mr Beal is doing building work to their house. He also does maintenance in the restaurant, and spends time looking after Tilly.

They do not have a cohabitation contract.

He said: 'The relationship works really well for us as it is. We have finally decided that Barbara should make a will and we are in the throes of doing it now. We are also sorting out a form so that I can have parental responsibility for Tilly.'

Barbara said: 'Everything is in my name, but I do feel it is an equal partnership. Andy is not contributing money, but he is contributing time and labour and support.'