Property (Relationships) Act 1976 - Sharing of Relationship Property upon end of Relationship

The Property (Relationships) Act presumes that you and your spouse or partner contribute equally to your relationship. The Act provides a just division of relationship property if the relationship ends


As from 1 February 2002 , the Act applies to all married and civil union couples and those who have been living together in a de facto situation for a minimum of three years.

A de facto relationship of less than three years may be covered by the Act where there are children or one partner has made a substantial contribution to the relationship.

The Act also applies on death as well as on separation. Surviving spouses or partners now have a choice either to apply for a division of relationship property under the Act (Option A) or to accept whatever is provided for them in the Will of the deceased spouse or partner (Option B).

Relationship property includes your family home, your family chattels, all property jointly owned by you and your partner and (with a few exceptions) all property acquired by either you or your partner after your relationship began.

Relationship property will normally be divided equally following the end of a relationship (whether marriage, civil union or de facto) that has lasted more than three years, unless the Court determines that there are extraordinary circumstances which make equal sharing repugnant to justice . The Court may take property transferred to a trust during a relationship into account if it is considered that the transfer had the effect of defeating the sharing of relationship property.

If you and your partner want your own sharing arrangements to apply to your relationship property if your relationship ends (either on separation or death), the Act provides that you may enter into what is known as a Section 21 agreement .

Key concepts that you should know...

We know that this isn't a romantic topic, but it is important that you and your partner consider the consequences of your relationship ending (for each other and for any children, including children from previous relationships). Our lives are increasingly more complicated, with different relationships at various times and our responsibilities changing along the way.

A Section 21 agreement allows you and your partner to make your own determination about property ownership, and how it is to be shared, if the relationship ends. A Section 21 agreement can specify the separate property of each party which is to be excluded from your relationship property pool and how your relationship property is to be divided.

If a Section 21 agreement results in serious injustice , the Act provides for the Court to review and, possibly, overturn it in which case the Act will apply. If there is no Section 21 agreement, the sharing regime provided by the Act will apply.

For a Section 21 agreement to be enforceable:

  • it must be in writing
  • you and your partner must each be independently advised by your own different lawyers before it is signed
  • it must be signed by both you and your partner
  • each signature must be witnessed by a lawyer who must certify that they explained the effect and implications of the Section 21 agreement

How we can help you ...

We can prepare a Section 21 agreement to record what you and your partner have decided about property ownership, and how it is to be shared, if the relationship ends.

You will need to tell us about your relationship, including how long you have been in the relationship, what property is to be kept separate and how you and your partner's property is to be shared.

We can provide you with detailed advice to ensure that you understand the Section 21 agreement process and the necessary professional support throughout that process.

We can advise you about the fairness and appropriateness of a Section 21 agreement, assess your entitlement under the Act and give the necessary certificate about how we explained the Section 21 agreement.

 

The content of this document is necessarily general and readers should seek specific advice on particular matters and not rely solely on this document.
If you would like further information on any of the topics in this document, please contact the writer or your usual Auld Brewer Mazengarb & McEwen adviser.
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