When a flatmate becomes something more

The Property (Relationships) Act 1976 (“The Act”) provides an equal sharing presumption to relationship property for qualifying relationships. Qualifying relationships are marriages, civil unions or de facto relationships that are a minimum of three years in duration.

Section 2D of the Act defines a de facto relationship as a relationship between two persons who are both aged over 18 years, who “live together as a couple” (either heterosexual or same sex relationships) and are not married or in a civil union to one another. 

If the parties are under the age of 18 years, the de facto relationship starts from the time the younger partner turns 18 years old.

 In determining whether two persons are “living together as a couple”, all circumstances of the de facto relationship are to be taken into account including the matters recorded at section 2(D)(2), which are:

• The duration of the relationship. 

• The nature and extent of the common residence of the relationship. 

• Whether or not a sexual relationship exists. 

• The degree of financial dependence or interdependence and any arrangements for financial support, between the parties. 

• The ownership, use, and acquisition of property. 

• The degree of mutual commitment to a shared life. 

• The care and support of children (either from that relationship or from previous relationships).

• The performance of household duties. 

• The reputation and public aspects of the relationship. 

None of the above factors are essential to determine whether the parties are living together as a couple and the Court is entitled to attach such weight to any matter as is appropriate in the circumstances of that relationship.

Marriages and Civil Unions are legal processes, which require the parties to opt in from an agreed commencement date.  However, there is no formal process that records the commencement date of de facto relationships. This usually leads to the parties unknowingly entering into a legally defined relationship well before they chose to declare their relationship (agree that their relationship is serious enough to commit to one another or tell friends and or family they are in a relationship) leading to the Act applying retrospectively, rather than from an agreed date.

This can be financially crippling to parties that have amassed assets and property prior to the commencement of the de facto relationship as the de-facto partner may be entitled to half the value of those assets and property.

The ending of a de facto relationship is a question of fact and occurs either when one partner regards the relationship as over and has communicated that intent to the other partner or one partner dies.

Parties are also able to enter into contemporaneous relationships with different partners at the same time.

A remedy available to parties is that they are able to contract out of the terms of the Act by way of s21A of the Act. This type of agreement is called a Contracting Out Agreement or otherwise known as a “pre-nup”, even if it’s within the relationship.

If you find yourself in the above situation, gaining legal advice from a lawyer that deals with relationship property law could save you a lot of money in the future. 

If you would like advice on relationship property matters, including contracting out agreements contact either Julie or Claire:

Julie Millar     P: +64 6 370 6478  E: julie.millar@gibsonsheat.com
Claire Byrne  P: +64 4 916 7483  E: claire.byrne@gibsonsheat.com.