De facto relationship property rights

De Facto Relationship Property Rights

Let’s start here, the most important thing you need to understand is that the Family Law Act applies to married & civil union couples irrespective of sex, religion or type of relationship. You may not have married your partner but these laws give de facto relationship property rights to relationships that meet the threshold criteria. These rights are similar to married couples.

De Facto Relationship property rightsMany people initially think, “Oh those laws wont apply to me because my relationship was different…”. Think again! It does not matter if your relationship ends through separation or death your ex partner may well have de facto relationship property rights to property of the relationship.

Being transparent at the start of your de facto relationship and discussing with your partner any & all de facto property settlement matters, should your relationship end is extremely important. Bare minimum you should give these matters careful consideration privately and seek advice if unsure about where you stand.

What is most interesting is how these laws impact people who have deliberately chosen not to marry for any number of reasons. It is this group of people who could find themselves subject to a de facto property settlement matter should their de facto relationship meet the threshold criteria. It is no longer enough to simply not marry, these matters need to be given careful thought and agreements set in place.

The Family Law Act, sets out that a de facto relationship can exist only when both parties to it are at least 18 years of age, are living together as a couple on a genuine domestic basis & are not married to each other or in a civil union.

These are the essential but not all of the factors that will determine whether a relationship is or was a de facto relationship and in turn enables one party to claim de facto relationship property rights under the Family Law Act. The issue of whether there was a de facto relationship in terms of the Family Law Act and the date it began may be questions of fact for the court to decide.

Courts will consider a number of things, including:

  • length of the relationship; the extent to which a home was shared; financial interdependence;
  • acquisition of property and how it was used; did a sexual relationship exist; support of any children either of you had;
  • household duties; level of mutual commitment to a shared life;
  • how did others view the relationship & commitment within it; and
  • any other matters that seems appropriate.

You should be starting to get a sense of how these laws might impact you & what your rights actually are. Just a word of caution, what one party views as a casual relationship with no long-term commitment is not always viewed the same way by another party. The only way to be absolutely certain that you & your partner share the same view of your relationship & the commitment within it is to document it.

Ask yourself this question, when did your relationship stop being girlfriend/ boyfriend and become a more serious de facto relationship? If appropriate, ask your partner this question you may be surprised by the answer you get. The date of this transition from girlfriend/boyfriend to de facto couple matters very much as it will be from this date that your relationship becomes subject to de facto relationship property rights. It may be useful to agree in writing on the date your de facto relationship began or potentially confirm with your partner that you do not consider the relationship to be a de facto relationship.

What if you think your relationship could be classified as de facto and you do not want these laws to apply to you? If this is the case then you will need to discuss this with your de facto partner and “contract out” which means you will need to create an agreement with your partner commonly known as a binding financial agreement where you both agree to be governed by the terms of the agreement (and not the Family Law Act) should your relationship end. Keep in mind you will be asking your de facto partner to sign away their de facto property rights so a preparedness to negotiate is paramount.

Please do not think “oh, we haven’t been together or lived together long enough to be classed as a de facto couple…” The minimum period of 2 years is the minimum period a relationship must have existed for to meet the threshold criteria. Be aware that there have been many cases where shorter relationships have been found to have met the threshold criteria, for example where there are children of the relationship or one partner has made substantial contributions. These things (if found) will enable your de facto partner the right to seek a de facto property settlement or adjustment through the courts.

Once a de facto relationship is found to have met the threshold criteria relationship property may be divided equally or however the court deems appropriate, following the end of a relationship.

The court has multiple ways of dividing property however in many instances, property is divided according to the contribution each partner has made to the relationship. One person may be awarded a higher percentage if they are deemed to be at a serious economic disadvantage because of the division of roles during the relationship for example.

Don’t think you can simply hide assets to stop your ex partner accessing them. If caught the courts may take a dim view and deem your conduct to have affected the amount or value of relationship property. Your ex partner may be awarded compensation if it can be shown that one partner has decreased or increased the value of relationship property after separation. Usually each partner retains their separate property unless your de facto partner has made significant contributions to it. For example, a renovation on a property held in one party’s name. This will give the other party the ability to claim de facto rights to that property.

If property is divided according to contribution, both financial and non-financial contributions are taken into account when considering the makeup of a de facto property settlement or adjustment.

Non-financial contributions can include such things as raising children or other family members, running a household, improving property, helping your de facto partner in their work or business, or enabling your de facto partner to study while the other works and funds living costs.

As well as providing money and financial support, financial contributions can include increasing the value of relationship property or property held in one partner’s name only. All of these things impact de facto relationship property rights of both parties.

Where there will be economic disparity between the partners after separation and that economic disparity is caused by the division of functions during the relationship, the court may decide that the partner left at an economic disadvantage should get a higher percentage of relationship property as part of a de facto property settlement or adjustment.

Remember, the information contained on the site does not constitute legal advice. If you think you need legal advice you should contact an Accredited Family Law Specialist.

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