Our Guide to De Facto Property Rights in Australia

If you are leaving a de facto relationship, it is important to seek legal advice regarding your property rights. Many people do not know this but, under the Family Law Act 1975, a de facto couple has the same rights as a married couple when it comes to property distribution. So, what do those rights look like for de facto couples?

What is a De Facto Relationship?

A de facto relationship in Australia is a relationship in which a couple who is not married lives together on a genuine domestic basis. A couple can either be the same sex or the opposite sex under Australian law. In order to be classed as a de facto relationship, the couple must have lived together for two years without separation.

Section 4AA of the Family Law Act 1975 outlines all factors when considering the a de facto relationship. Some factors include:

  • the duration of the relationship;
  • whether a sexual relationship exists;
  • the degree of mutual commitment to a shared life; and
  • the nature and extent of their common residence.

Understanding De Facto Property Rights and the Court

If you’re in a de facto relationship and you would like to understand your property settlement rights, first, you must know that there is a time limit to file your property settlement application. An application must be made within two years of the breakdown of the relationship.

Under section 44(6) of the Family Law Act 1975, the court may consider applications outside of this time limit if it is satisfied that:

“(a) that hardship would be caused to a party to the relevant marriage or a child if leave were not granted; or

(b) in the case of proceedings in relation to the maintenance of a party to a marriage–that, at the end of the period within which the proceedings could have been instituted without the leave of the court, the circumstances of the applicant were such that the applicant would have been unable to support himself or herself without an income tested pension, allowance or benefit”

Property According to Australian Law

Under Australian Law, property includes assets and debts. Just like a married couple seeking divorce, a de facto couple can claim property rights to:

  • Bank accounts
  • Real estate
  • Shares and other investments
  • Business assets
  • Personal property, including cars
  • Debts
  • Superannuation

De Facto Property Rights – the Property Settlement Process

You and your ex-partner can make informal arrangements regarding your property after separation. However, it is important to note that these arrangements are, in no way, legally binding. If you wish to formalise your arrangements, you can apply for a Consent Order through the courts. The de facto property settlement process follows these four steps.

Step One: Identify and value all assets, liabilities and resources of both parties.
Step Two: Consider the contributions that each party has made throughout the relationship. These contributions include earnings, gifts, savings and property owned before the relationship.
Step Three: Consider the future needs of both parties. These needs include the age and health of each person, income and earning capacity, care and financial support of children and the property of each party.
Step Four: The court reviews its assessment and makes any adjustments to achieve a fair and equitable distribution.

The family courts can order the division of property if one of the following conditions are met:

  • The de facto relationship lasted at least two years;
  • The de facto couple had a child;
  • One party made significant financial contributions and it would be a serious injustice if an order is not made; or
  • The relationship was registered under a prescribe law of a State or Territory.

How to Protect Yourself in a De Facto Relationship?

If you are in a de facto relationship and wish to protect your property rights, we recommend seeking legal advice from a family lawyer to achieve this outcome.

One option is to work with a family lawyer to create a Binding Financial Agreement (BFA), a contract that formalises how a couple’s assets, property and liabilities are split after separation. A BFA can be entered at any time of the relationship, and doing so will give you peace of mind and reduce the risk of possible litigation in the future.

Another option is to agree to keep your finances as separate as possible. For instance, you and your partner might wish to avoid joint bank accounts and take responsibility for each other’s debts.

Speak to Our Lawyers About Your De Facto Property Rights

Whether you’re entering a de facto relationship or your relationship is in the process of breaking down, it is necessary to understand your property rights. Our team at Emerson Family Lawyer have years of experience dealing with property settlements for both married couples and de facto relationships. We’ll also provide you with tailored advice to suit your specific needs and circumstances. Please get in touch with our team to see how we can assist you.