DIVIDING RELATIONSHIP PROPERTY PROPERTY (RELATIONSHIPS) ACT 1976

In New Zealand, Property (Relationships) Act 1976 provides that upon breakdown of any relationship that has lasted for three years, each partner to a relationship shall have equal share in the family home, family chattels and any other relationship property. Relationship here refers to a marriage, de facto relationship or civil union.

DIVIDING RELATIONSHIP PROPERTY PROPERTY (RELATIONSHIPS) ACT 1976

Due to required legal formalities there is little difficulty in establishing a marriage or a civil union, but in case of de facto relationship because it is informal and fluid, it needs to be proved in the court. The Property (Relationships) Act lays down some criteria for the court to consider when deciding if a de facto relationship existed and when it started. If you own one home, some furniture, a car and a joint bank account and you have been living together with your partner in that home, using the car and contributing towards the bank account, it is a relationship property and you are entitled to equal share from all such property. But there are some separate properties of each partner which you must be able to understand. Remember only relationship property shall be divided into 50: 50 and not separate property. Separate Property has been defined in the PRA. But there is one exception to the equal sharing rule. Section 13 of the PRA states that where the Court considers there are extraordinary circumstances that make equal sharing contrary to justice, the court can look at the contribution of each partner to the relationship. But if the marriage, de facto relationship or civil union comes to an end inside three years then the relationship is legally regarded as being one of short duration and in such cases, the rule of equal sharing of relationship property does not apply. Even if the marriage or relationship has lasted for over three years, the court has the power to consider it as a relationship of short duration if in all the circumstances the court considers it just. Importantly PRA does not apply at all to de facto relationships of short duration, unless there are children, or the partner applying to the court has made a substantial contribution to the de facto relationship and the failure to make an order would result in serious injustice. Otherwise, parties to a short-term de facto relationship walk away with what they took into the relationship. For those who have been married, the equal sharing provisions in the PRA, do not apply to any asset that was owned wholly or substantially by a partner prior to the relationship commencing, or any asset that was obtained afterwards by inheritance, survivorship, gift, or as a beneficiary under a trust. The share a partner receives is determined by the contribution of each partner to the relationship. Any other relationship property would be shared equally unless the contribution of one partner has been clearly greater than the other. Contracting Out or Pre-nuptial agreements The Property (Relationships) Act 1976 allows partners to contract out of the equal sharing provisions of the Act. The law says such agreements must be in writing as a proper legal deed and each party to it must receive independent legal advice from a lawyer. Any other informal sort of agreement is not legally binding. The agreement might set out in detail how the partners have agreed to split their property as they separate. It must also include what the partners have agreed about the ownership and status of the property they hold as they enter into a marriage or de facto relationship. It is important to discuss such agreements frankly before entering into a relationship. Although equal sharing does not apply until three years has gone past it can be difficult to negotiate a suitable agreement when the three years limit is fast approaching. It is also important that the agreement must look fair to both parties. Notwithstanding the provision for independent advice, Family Court retains the right to set aside an agreement if having regard to all the circumstances, it is satisfied that giving effect to the agreement would cause serious injustice.