Separation – what are cohabitants entitled to?
Did you know that cohabitants do not have the same rights as spouses upon separation under Norwegian legislation? The rules for the settlement between cohabitants may therefore come as a surprise to cohabitants when the relationship ends. In this article, we provide a brief description of the most important rules for the financial settlement between cohabitants.
Which rules apply to the settlement between cohabitants?
There is no “Cohabitation Act” in Norway. The financial settlement when cohabitants separate is based mainly on general rules of property law and case law. In addition, the Household Community Act contains rules that in certain cases may give one cohabitant the right to take over the shared home and household contents.
Read more: Cohabitant? Then you should know about this proposed legislation
In the event of a separation between cohabitants, there is no automatic division as in a divorce between spouses. As a general rule, each cohabitant takes with them what he or she owns, and their own debt. Since each cohabitant keeps what is theirs, it is not uncommon for cohabitants to disagree about which of them owns what, and in what proportion.
The starting point is that the cohabitant who purchases an asset also becomes its owner. If the cohabitants purchase something together, the asset will as a general rule be held in co-ownership between them. In the absence of an agreement between the cohabitants, ownership must be assessed concretely on the basis of the circumstances surrounding the acquisition, both partners’ contributions to the acquisition and the use of the asset.
The starting point is that the person who has made the direct (financial) contributions to the acquisition becomes the owner. Direct contributions typically include:
• Equity contributions
• Own construction work
• Taking out loans
• Repayment of loans.
A cohabitant may also acquire an ownership share through indirect contributions to the acquisition. Indirect contributions typically include:
• Work in the home
• Payment of household expenses (food, kindergarten, electricity, etc.)
The idea behind this is to capture situations where one cohabitant, through work in the home or by covering household expenses, has made it possible for the other to purchase an ownership share or to pay down a loan on an asset. In such cases, this cohabitant may also, following a concrete assessment, be awarded an ownership share.
The fact that the cohabitants keep their own assets and debts does not always produce a fair result. In some cases, it may be relevant to claim compensation in order to correct an unequal settlement.
There are two conditions for being awarded compensation:
• The cohabitant must have conferred a significant financial benefit on the other in the form of enrichment or saving
• It must be reasonable to award compensation: Considerations of fairness, taken as a whole, must require that a correction be made in the form of compensation.
Yes, cohabitants can to a large extent agree on how the financial settlement is to be. They can, among other things, agree on the ownership of various assets, liability for debt, the allocation of expenses and how assets are to be divided upon separation.
Why should you have a cohabitation agreement?
A written agreement usually makes it far easier to carry out an orderly settlement if you separate. Without an agreement, the starting point may be what appears on the deed or the receipt, and not necessarily what the cohabitants intended during the relationship.
A written agreement usually makes it far easier to carry out an orderly settlement if you separate. Without an agreement, the starting point may be what appears on the deed or the receipt, and not necessarily what the cohabitants intended during the relationship.
Typical risk factors
- Different amounts of equity contributed when purchasing a home result in an unexpectedly uneven distribution upon separation.
- One of the cohabitants pays more towards the mortgage or upgrades without receiving compensation.
- One of the cohabitants wishes to own part of the shared home, but has not contributed equity or paid towards the mortgage. The cohabitant has contributed by paying household expenses or through work in the home.
- Lack of documentation makes it difficult to prove financial contributions.
Without an agreement, it can be difficult to determine who owns what, and in what proportion. This leaves room for disagreements between cohabitants. A cohabitation agreement can help reduce conflict and spare you many painful disputes later.
Read more: Brækhus’ expertise in family law and inheritance.
Contact us for legal assistance
We can assist you in drawing up a tailored cohabitation agreement that provides predictability in case you separate, or if one of you passes away. Fill in the form below, or contact us directly.
