When a relationship has ended there are arrangements to make and questions that need answers. What is likely an emotionally charged time, is a busy one too. A common concern is, what happens with the property that was shared in the relationship? That depends.
The rules outlined in the Property (Relationships) Act 1976 will govern what happens next. The ‘Act’ is essentially a ‘how-to’ guide that the courts use when dealing with the question of relationship property.
The one rule to guide them all
The one rule for all relationship property – is to divide it equally, unless there are extraordinary circumstances that make equal sharing unacceptable. People who are married, in civil unions, or in de facto relationships (including same-sex couples), who have lived together for at least three years, split shared property 50/50.
Separate property is not divided when a relationship ends. But, if your separate property gets mixed with relationship property or used for relationship purposes, then it may become shared property. To protect separate property you’ll need to make arrangements with your partner or spouse.
Since 2002, the equal sharing rule also applies to a surviving spouse or partner. This means if one partner dies the survivor has to choose whether the property is divided under the rules of the Act or under the deceased’s will. If there is no will, then the statutory “rules of Intestacy”, based on the Administration Act 1969, apply.
Exceptions to the one rule
Shares of the property are divided up differently for couples living together less than three years. In marriages and civil unions of short duration, the property (except for the family home and chattels) is shared equally, unless one person’s contribution was clearly greater than the other.
In a de facto relationship of short duration, the ‘Act’ doesn’t apply at all. Unless, there is a child of the relationship or one partner has made a significant contribution to the relationship, or if it would create a serious injustice, then the share is determined by each partner’s contribution.
A de facto relationship is any couple who live together and are over 18 years of age. Though the court will look at relevant factors like length of time together, degree of dependence or interdependence, care and support of children, and more, to decide whether two people live together as a couple.
Ruling power of the courts
The court has the power to make various orders in relation to the property. It can award lump-sum payments, order property to be sold, or even give one party the right to occupy the property, especially if it considers it is in the interests of any dependent children.
The aim of the court is to address any economic advantages or disadvantages that one party may have as a result of the relationship. It’s a principle-driven approach to dividing relationship property.
Would you like to make your own rules?
A couple may voluntarily enter into a separation agreement and decide for themselves how they want to divide relationship property. They “contract out” by entering into a valid property agreement. Next week, we’ll fill you in on how to complete a Relationship Property Agreement (RPA) to satisfy the conditions of ‘contracting out’.
Call the team at Gallie Miles for advice on any relationship property matter.
To learn more about relationship property, why not join us on 23rd November for a FREE relationship property seminar. Register HERE