Do I need a relationship property or contracting out agreement?

Published by Vanessa Crosby on November 07, 2011

I think most of us would agree that when you have been in a relationship for a long time

 I think most of us would agree that when you have been in a relationship for a long time, had children together, worked together to build up assets for the family then the equal sharing regime put in place by the Property (Relationships) Act 1976 makes sense. To quote Lord Nicholls in a recent case in the House of Lords – “Fairness requires no less”. 

Inevitably however in this modern world not everyone’s relationship fits in a neat box and not everyone wants the state to decide how their property is to be divided.  In that situation it is possible to contract out of the Act.

Who should have a contracting out agreement?

•          Couples moving in together who each have assets they wish to protect

•          Couples entering into a relationship where one party has significantly more assets than the other

•          People in second relationships particularly where they each have children from previous relationships

•          Where one party owned a home prior to the start of the relationship that the couple have now decided to make their family home 

•          Someone receiving an inheritance


If you decide you need an agreement the more information you provide your lawyer the better the agreement will be.  You will need to list your separate property and relationship property.  Your lawyer will advise you to obtain valuations of all the property.  You cannot prepare your own contracting agreement.  There are strict formalities that need to be followed if the agreement is to be binding.  Assuming the formalities are followed the agreement will be binding in all circumstances.  The agreement will only be overturned by the court in the case of serious injustice.  This is a high hurdle to overcome so no contracting out agreement should be entered in to lightly.


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