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This information on the Property (Relationships) Act 1976 provides general information to the public only. If you want information or advice on how the Act applies in your situation then you should seek legal advice from a lawyer, or your local community law centre. The general disclaimer for the Ministry of Justice web site also applies to this information on the Property (Relationships) Act. Please read it.
Frequently Asked Questions
The Property (Relationships) Amendment Act 2001
The Property (Relationships) Amendment Act extends the matrimonial property regime to de facto (including same sex) relationships and to all marriage and de facto relationships that end on the death of one of the spouses or partners (as well as on separation). The amendment also provides new measures to address economic disparities between partners and spouses arising from the division of functions during the marriage or relationship.
In the following questions and answers, reference to "the Act" means the Property (Relationships) Act 1976, i.e. the Matrimonial Property Act 1976 with the amendments incorporated.
Who will the Act cover?
Married couples.
Opposite sex de facto couples.
Same sex de facto couples
When does the law come into force?
The changes come into force on 1 February 2002.
What de facto couples does the new law apply to?
The new law applies to de facto couples where both partners are over 18, the relationship has existed for at least 3 years and ends after 1 February 2002.
There is an exception for some de facto relationships that are less than 3 years duration, for example if there is a child of the relationship the new law might apply.
How do we know if our relationship is a de facto relationship?
The Act has a definition of de facto relationship. A de facto relationship is a relationship between two persons who are over 18 and who live together as a couple. The Act also provides a list of factors to look at to help determine whether 2 persons are living together as a couple. These include, common residence, whether there is a sexual relationship, financial arrangements, ownership, use and acquisition of property, mutual commitment to a shared life and care of children. It is not necessary that all the specified factors are present and other factors may be relevant in a particular case. All the circumstances of the relationship are taken into account.
What do we do if we don't want the Act to apply to our de facto relationship?
De facto couples can contract out of the Act from 1 August 2001. The contracting out provisions come into force 6 months before the rest of the Act so that de facto couples can get their contracts into place before the main parts of the Act apply.
To contract out couples must agree in writing and each party must get independent legal advice.
If couples already have a contracting out agreement that is valid under the general law it will still be upheld under the new law.
When can we make a contracting out agreement?
All couples can make a contracting out agreement before or at any time during the relationship.
What will happen if we don't make an agreement?
The rules in the Act will apply to property division when the relationship ends. The general starting point is that relationship property will be divided equally between the partners.
What is relationship property?
The Act keeps the distinction in the Matrimonial Property Act 1976 between separate property (which generally stays with the spouse or partner who owns it) and relationship property which was formerly known as matrimonial property (and which is available for division between the spouses or partners). For many people, relationship property will primarily consist of the family home and family chattels (eg car, furniture, appliances). The starting point for division of relationship property is equal shares.
What happens to separate property?
The rules defining separate property will generally remain the same. However, there are two changes aimed at addressing economic disparities which affect separate property. First, where there are likely to be significant economic disparities arising at the end of the marriage or relationship because of the division of functions during the relationship and one spouse or partner has increased the value of his or her separate property during the marriage or relationship, the court will be able to award a lump sum to the non-owner in compensation for the increase in value of the separate property. Second, any increase in value of one spouse or partner's separate property that is directly or indirectly attributable to the actions of the other spouse or partner will be converted to relationship property (currently only direct actions are taken into account).
How will debts, like student loans, be treated under the Act?
Under the legislation there are 2 types of debts; relationship debts which are deducted from relationship property, and personal debts which are the responsibility of the spouse or partner that incurred them. Relationship debts are those incurred:
How one spouse or partner's student loan will be treated depends on whether it is classified as a relationship or personal debt and that will depend on what the loan was used for.
Are there any circumstances where one spouse or partner may get more than half of the relationship property?
If the Court considers that there are extraordinary circumstances that make equal sharing of relationship property repugnant to justice then the share of each spouse or de facto partner in that property will be determined in accordance with the contribution of each spouse or partner to the marriage or relationship.
Are there any other circumstances where one spouse or partner will be entitled to more than half of the relationship property?
If there are likely to be significant economic disparities between the spouses or partners because of the division of functions during the marriage or relationship, the court can award lump sum payments to compensate the partner who is worse off.
What will the court look at in deciding whether to make one of these lump sum awards?
The court will look at the likely earning capacity of each spouse or partner, the responsibilities of each of them for the ongoing daily care of children and any other relevant circumstances.
What happens to property when one spouse or partner dies?
The Act extends the equal sharing regime to the situation where one of the spouses or partners dies.
The surviving spouse or partner can choose to take what they are left in the will of the deceased spouse or partner or to opt for a division of property under the Act.
Can couples contract out of the application of the Act upon the death of one of the spouses or partners?
Couples can contract out of the rules that would apply on death in the same way they can contract out of the regime that applies on separation.
What if there is no will and no contracting out agreement?
If there is no will or agreement then the surviving spouse/partner can choose
Surviving de facto partners are now included in the same way as surviving spouses in the list of people who are entitled to property under the intestacy rules.
Are there any changes to the law governing family trusts/companies?
Currently, if property has been transferred to a trust or company in order to defeat the other spouse's claims or rights under the Matrimonial Property Act 1976, the court is empowered to make a range of orders including transferring property or requiring payments to be made. There are now new provisions which give the court compensatory powers where relationship property has been transferred to a trust or company during the marriage or relationship which has the effect of defeating a spouse or partner's interests, even if there was no intention to defeat those interests. In ordering compensation, the court cannot order the capital of the trust to be distributed to the affected spouse or partner.