North Carolina’s Definition of Cohabitation
In North Carolina, cohabitation is defined as two people, including members of the opposite sex and same sex, who are not married to one another and are currently residing in the same household in a sexual relationship. This requirement was laid out by the North Carolina Supreme Court in cases, citing its prior decisions in Slaughter v. Slaughter, 55 N.C. App. 525 (1982) and Diaz v. Parson, 326 N.C. 706 (1990).
Contrary to popular belief, the North Carolina definition of cohabitation is "neutral" and does not make value judgments based on whether the relationship is traditional or non-traditional; homosexual or heterosexual.
Specifically, to meet the definition of cohabitation, a couple must live together. Some factors used by the court to determine whether a couple lives together are: The party seeking to terminate alimony has the burden of proving instances of cohabitation by what is generally known as "clear and convincing evidence," meaning that the evidence probative of the conclusion to be reached must be 75 percent certain. This differs from the burden of proof in most civil matters, which is the mere "preponderance of the evidence," meaning that the evidence must merely weigh more heavily in favor of one side or another.
The North Carolina courts have held that a showing of sexual activity between the parties is enough to establish cohabitation. However, a defendant’s alleged cohabitation may be insufficient to terminate an alimony obligation if his or her conduct does not rise to the level of a "sexual" relationship under the law. Cohabitation requires more than merely sharing a residence and expenses with another person. Instead, the relationship includes a probable intention of being exclusive, sexually intimate partners.
In 2008 , North Carolina’s legislative action gave the state’s enforcement of its criminal conversation law less content by amending the statute to require that the conduct leading to divorce occur during the marriage. Prior to the amendment of the statute, evidence of misconduct occurring after separation but before the filing of the divorce action could have been used as grounds for a criminal conversation claim. This change was intended to protect some couples who, though they were separated, were able to remain committed to their vows by refraining from any behavior that would lead to the breakup of their marriage.
Some states define cohabitation as living together as husband and wife. In other states, such as South Carolina, any sexual, intimate relationship is sufficient to establish cohabitation leading to the termination of alimony.
While the North Carolina courts have not yet defined what constitutes a sexual, intimate relationship, the Dunn v. Dunn case decided in 2003 made a definitional leap by stating that if the parties have had sexual relations at any time during the period in question, that is sufficient to demonstrate cohabitation. The case did not define "sexual relations" any further.
In Dunn, a citizen of Sweden living in Sweden began dating a woman who had separated from her husband and lived in North Carolina. After several months, she moved to Sweden to be with the man. After 15 months of living together in Sweden, they married in Jamaica. Subsequently, the North Carolina court terminated the alimony obligation even though the parties did not exactly meet the legal definition of cohabitation because the period in question included 15 months of sexual relations. The outcome in the Dunn case is a good example of how courts have enforced North Carolina’s cohabitation statute to ensure that alimony is awarded only for so long as it will serve its purpose by requiring proof of sexual relations during the applicable time period.
Cohabitants and Their Legal Rights
Cohabitation per se does not create rights or obligations, at least not directly. Living together under the same roof, sharing a bank account and card, and combining income are not the same as being married. However, a cohabiting couple can indirectly create rights and obligations, through agreements and conduct. As with everything contractually-related, they arise from the specific words used and actions taken.
As I’ve noted previously, a cohabiting couple may have a contract with each other, either express or implied. (See my prior post.) I explained that these agreements can address timely and important issues like income and expenses, property ownership and rights, and even spousal support. The couple may choose to memorialize this contract in writing like a usual legally binding contract, or one or both parties may simply believe that the terms are implied, relying on the good faith of all involved. At some point, however, something may happen that causes these parties to argue. They may no longer trust each other. One party may believe the other has violated the contract or somehow damaged him or her. At that point, it can be too late to enforce a valid contract if one was never made. This is why writing down a contract for live-in boyfriend or girlfriend is so important.
Property rights are often at issue. Who owns what? Who is responsible for what? In most states, including North Carolina, the answer is "it just depends." So many factors are involved that an attorney, judge, or jury cannot make a prediction about the outcome of a court proceeding involving property without knowing more details about the parties and their circumstances. These include discussing:
Additional qualifying questions apply. Did the property come about because of one person’s talent, skill, or background? What specific actions do the parties take in working toward their shared goal of supporting the household and its assets? How long have they been living together? It may be the equivalent of a common law marriage, which would then require the couple to divorce. Or perhaps they simply are roommates. There is no specific test to apply because the circumstances are unique to each case.
What happens when an asset is co-owned? You may have property that both you and your live-in partner own. Each party has an interest in the property, but the sale or division of the asset will depend on the type of co-ownership: tenants in common, joint tenancy, tenants by the entirety, and community property are some of the options. North Carolina chooses the former two. The couple can divide up a tenant in common property by agreement, but this must be made in writing. The asset can also be sold or one party can buy out the other. A joint tenant, by contrast, automatically receives ownership of the asset when the other joint tenant dies. A tenant in common can sell his or her share of the asset, but the surviving joint tenant may have the first right to purchase it. Courts can grant equitable division of a jointly owned asset in a separation or divorce proceeding.
Cohabitation rights and obligations are complex legal matters that can be discussed further during a consultation.
Cohabitation and Alimony
While the statutes governing alimony do not explicitly mention cohabitation as a terminating condition, it is well-recognized in North Carolina that moral or mental blameworthiness does not cease upon divorce or separation. Cohabitation qualifies as immoral behavior that carries its own stigma under societal norms. It may not be the same as adultery (adultery is defined as "a sexual act between persons who are not so related that one would ordinarily expect sexual relations between them"), but courts have long held that it qualifies as a sufficient basis to limit alimony payments under the premise that the supported spouse actually has support from the cohabitant.
The standard to modify alimony for cohabitation in North Carolina is whether, as a result of the supported spouse’s cohabitation, they are receiving support or financial assistance from the third person in addition to any income they are receiving. This standard is relatively straightforward if the evidence of support is clear. For example, if the alimony recipient rents a home from the third person at below-market rental rates and that rental is adequate for their use, the court may impute the difference between the below-market rental and the market rate rental as income into the alimony recipient’s budget. If the home is inadequate for their use, however, then the court may not impute any benefit to the recipient. Under some circumstances, the alleged loved one may even be obligated to provide support on their part, which would be relevant to the financial needs of the supporting spouse.
The fact that the recipient chooses to rent a home from the third person at a below-market rate as opposed to a market rate is significant under the cohabitation statute. There is case law to the effect that if the recipient wishes to have minimal rights to the premises, the below-market value is imputed as income into the alimony recipient’s budget of expenses, but if the rented premises are adequate under the circumstances and would be rented by the supporting spouse as opposed to an inexpensive arrangement with the alleged paramour, then there is not an imputation of income obligation. The imputed income would require the supporting spouse’s alimony obligation to increase, offsetting some of the expense relative to the premises.
The Court of Appeals generally finds that showing economic support or bonuses must be used consistently by the alleged paramour in order to be used to reduce the alimony recipient’s support relative to a particular budget. Courts also recognize that temporary situations for the relationship are acceptable, i.e., where there is recently divorced or separated, the parties will likely take extra measures of protecting each other’s rights rather than acting like long-term cohabitants. The premise of these holdings is that the property rights of the couple in the relationship and the ability to discriminate each other’s income and needs should have a factor on the proceeding concerning terminability and modification of alimony.
Cohabitation Agreements
Further, if the cohabitating couple would like to articulate their agreement concerning property rights and support obligations in the event of a relationship break-up or death, then a cohabitation agreement is appropriate. Cohabitation agreements are enforceable contracts that must be in writing, signed by both parties and capable of supporting a claim to relief. The North Carolina Courts require strict compliance with these requirements.
Keep in mind that status as a "spouse" does not give parties the right to take advantage of uncodified laws providing for the disposition of jointly owned property and support obligations for dependents as defined under North Carolina law. Instead , the couple must clearly outline their respective expectations, duties and rights in a contract for such obligations to be in effect.
There are many issues to consider when drafting a cohabitation agreement including how property will be held, how bills will be paid, how much time the parties will spend together, if there will be joint credit cards, if and how the relationship will be publicized, how household chores will be divided, and how health insurance will be handled.
My advice is to hire an attorney experienced in the field of family law to assist with drafting the agreement and to ensure that the agreement will be upheld in a court of law.
Common Problems of Cohabitants
Cohabitants often come to our firm for legal advice when they are separating or dividing up their household. Specifically, we sometimes see disputes over the division of property, financial obligations, and separation issues that are not typical in marriages. Further, we commonly see rectifying marital agreements such as Separation Agreements and Property Settlement Agreements. There are many problems that can arise in property division and distribution due to a lack of formal documentation during the relationship. If a full accounting of household finances is not created before the relationship ends, then it is often very difficult to recreate the history. It is not unusual for property to remain in the ownership of one party in the household but for the other party to continue to pay maintenance, taxes, or other expenses associated with the property for many years. Ultimately, if this property is sold or inherited, or even just maintained through doing repairs, the money can become commingled or lost. This is especially true in relationships that last for many years. Similarly, cohabiting parties often acquire significant non-title holding property, such as furniture and other items purchased together. The need for equitable division of property therefore arises more often than not, and it often resembles equitable distribution issues for married couples. Although cohabiting couples often do not have attorneys prepare a written agreement or cohabitation contract, in which they agree on whether and how to convert assets if the relationship ends, they may now want to work that out after separation. Cohabitants should consider having a written contract, even if it means reconciliation. Cohabitant agreements may include property settlement agreements or separation agreements, prenuptial agreements, postnuptial agreements, and domestic partner agreements. All of these agreements require careful drafting to avoid unenforceability. We advise that cohabiting couples who wish to maintain their household together, enter into a written agreement that clearly defines the rights and obligations of the parties (and any third-party rights) to real and personal property. Such agreements should cover any provision for a monetary payment to one party by another in the event the contract is violated or if it should be terminated for any reason. Cohabitants may also wish to consider why they are cohabiting, such as for financial reasons, estate or healthcare purposes, or for convenience. In establishing agreements, cohabiting parties may wish to consider the duration of the agreement and what parameters constitute a "separation". Some may draft preemptive agreements that include remedies for breach of contract, and still others may address whether cohabitation will continue as the cohabiting relationship progresses (that is, can or should you move in together?). In any case, parties should ensure that these agreements contain explicit terminology that they do not intend to establish a common law marriage or mutual intent to marry the other (in the absence of a prior marriage).
Legislative Changes on the Horizon
Potential changes to cоhabitation laws in North Carolina appear to be on the horizon. In recent years, legislative bodies have considered the idea of repealing or revising antiquated cohabitation laws. Advocates for such changes argue that cohabitation is a common aspect of modern society and that the laws should reflect the reality of domestic arrangements today.
Opponents may contend that such a repeal could have negative effects on marriage, as it could encourage couples to forego tying the knot. Others raise concerns regarding potential moral implications and the legal complexities that may arise from a lack of cohabitation laws , particularly concerning child custody, support, and property division.
The legal community in North Carolina remains divided on the issue of reforming cohabitation laws. Some lawyers and legal scholars argue for change, believing that the laws should be modernized to reflect the societal shift towards accepting diverse domestic arrangements, while others maintain that the current laws serve an important purpose in protecting individuals and children. As of now, there are no concrete proposals on the table, but this remains an area of potential legislative action in the upcoming years.