What is a cohabitation agreement and why should I get one?

What are “financial agreements”, “binding financial agreements” or “BFAs”?

The terms “financial agreement”, “binding financial agreement” or “BFA” are often used loosely by lawyers and non-lawyers alike in reference to contractual agreements which parties may enter under the Family Law Act (1975).  When using these terms, maybe one specific meaning is intended. However, there are various alternative agreements which may be entered under the Act.

In this article we look at one specific type of BFAs: “cohabitation agreements”.

Cohabitation agreements

A cohabitation agreement may be defined as a contract between two parties which makes provision about how to divide their assets if they separate in the future.

Parties to a cohabitation agreement are contracting out of the provisions under the Family Law Act which would otherwise give them rights and entitlements against each other for a property settlement. Instead, they wish for their contract to provide what are their rights and entitlements against each other.

A cohabitation agreement may cover all assets of the parties or some of their assets.

If you would like more information or to make an appointment in either our Canberra or Queanbeyan office please contact Carlos Turini:

+61 2 6206 1300 | e: cturini@elringtons.com.au

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[1] https://elringtons.com.au/2011/03/prenuptial-agreement/

[2] Frequently, parties agree to a clause in the agreement that if they acquire real property jointly, they will own it as tenants in common (not joint tenants) and each party’s entitlement to the real property will be equivalent to the share of title – 30%, 40% etc;

[3] Thorne v Kennedy [2017] HCA 49 (8 November 2017) at Paragraph 56;

[4] Thorne v Kennedy [2017] HCA 49 (8 November 2017) was a case where the Trial Judge declared a pre-nuptial agreement void and set it aside as she concluded that the husband applied undue influence on the wife to sign it. The Judge described, among other things: the wife’s “…emotional preparation for marriage, and the publicness of her upcoming marriage.” Significantly, the High Court sided with the Trial Judge decision and, in the process, overruled the Full Court fo the Family Court which would have allowed the cohabitation agreement to stand;

[5] Family Law Amendment Act 2000 (which took effect from 27 December 2000);

[6] See Thorne v Kennedy [2017] HCA 49 (8 November 2017) referred to in (2) above; see also Wallace & Stelzer and Anor [2013] FamCAFC 199 (‘the pole dancer case’);

[7] See section 90G and section 90UJ of the Act;

[8] See section 90K and section 90UM.