Time limits for property settlement

Yesterday, all my troubles seemed so far away…

First and foremost, my husband was watching a documentary on The Beatles when I woke up this morning (Get Back, on Disney+, if you’re keen). So I have The Beatles on the brain. My son also has a thing for the word ‘Beetle’ at present because there are so, so, so many beetles around our house right now. Not even pretty Christmas beetles. Just really dumb ones that seem to keep capsizing and dying upside down in my bath tub?

No organic segue here, but rather an abrupt leap across to the topic I want to touch on. Which does, in fact, relate to troubles in the past and how, if you fail to address them, can be ‘here to stay’.

Time limits under the Family Law Act 1975 (Cth)

To be all lawyerly and professional, or at least somewhat, I will first refer you to Section 44 of the Family Law Act 1975 (Cth) (‘the Act’). For anyone that is not dealing with their family law matters in Western Australia, this applies to you.

In short, there is one critical thing I really want you to know if you need to complete a property settlement – you do not have forever.

The time limits you need to know are:

• If you were married, you have one year from the date of divorce to apply for a property settlement.
• If you were in a de facto relationship, you have two years from the date of separation to apply for a property settlement.

Just to clarify, as you cannot apply for a divorce until you have been separated for a period of at least 12 months, the Act is somewhat consistent in allowing about two years for separating couples to finalise their property settlements.

In saying that, some people don’t rush to formalise their divorce. This can potentially leave you open to a property settlement claim in the meantime, including any wealth and assets you have built in the years post separation. So be aware of this too!

What are your options if you are out of time?

If you are out of time under Section 44 of the Act, you have some other possible options:

1. Depending on how you want to finalise your property settlement, you may not require any kind of formal agreement. If you are simply keeping what is yours, splitting what you own together, and maybe selling the house (and agreeing on how much of the profit each of you receive), there may be no benefit or need for an agreement. I recommend getting some initial advice from a lawyer first, just to make sure.
2. You can enter into a financial agreement under Section 90D or 90UD of the Act. This is kind of like a personal contract between the two of you, but is recognised under Australian law, and can be evidenced to state authorities to avoid certain things like stamp duty if you are transferring ownership of a property. Whilst the cost of the agreement can be higher than if you had entered in consent orders within the time limits, it is usually much lower than the stamp duty you might otherwise incur. Again, speak with a lawyer to confirm your best way forward.

The reason financial agreements can be so costly is because of the extent of work that must be completed by your lawyers and the additional time this takes.

Whilst consent orders are overseen by the courts, to ensure that they are just and equitable, financial agreements are not. Rather, they are left in the hands of each parties’ lawyer to consider and advise on whether they are just and equitable, and whether a client should be entering into the agreement. Unlike applications to the court in which a client declares that they have made full and frank disclosure of their financial situation, which doesn’t necessarily have to have been sighted by a lawyer, financial agreements require full disclosure of all assets and liabilities, and this should be evidenced with statements, valuations and any other relevant paperwork.

Theoretically, the lawyer is taking on the role that would otherwise fall to the court, in considering the facts, assessing the justice and equity of the proposed property settlement, and advising you on whether or not you should be signing the document. This will also usually require a comprehensive letter of advice from your lawyer detailing their position.

It’s a lot of work. It can take some time. And I promise you, you would rather have just entered into consent orders during the time you should have made the application.

What’s the worst case scenario?

This one came to me yesterday as an initial question from a colleague who works in a different area of law.

A friend had separated a number of years ago from the de facto partner. The former partner remained in the jointly owned house, with the children, whilst the friend continued to pay the mortgage.

The friend now wishes to sell the property, but the former partner will not agree.

The friend is out of time under the Act.

The former partner won’t enter into a financial agreement as they… just don’t agree.

As they don’t agree, there is definitely no scope to do anything informally.

So where does that leave the friend?

Although there is scope to seek leave to apply for property settlement out of time, my usual description of acceptable mitigating circumstances is ‘if you were laying on your death bed in a coma for the last two years, then you might stand a chance’. The threshold is high. Most people won’t meet it.

In this instance, it leaves the friend investigating civil and financial options to resolve the issue. Whether they would have grounds to apply in civil proceedings I can’t say. In theory they could just stop paying the mortgage and force a sale, but obviously that has significant repercussions on a person financially (credit ratings and bankruptcy for example).

I don’t envy the position the friend is in.

Sadly, I have given my advice to other friends in similar positions over the years, and seen my advice go entirely ignored. Thank goodness for conflict of interest and my inability to act when that cesspool hits the fan.

The moral to the story.

The moral to the story is blatantly obvious. Almost everyone knows that the law has timeframes. It’s in the movies.

If you know someone that might need a reminder, though, can you please remind them?

Get legal advice. Or at least be aware of your time limits and put a date in the calendar to ensure that you don’t let time get away from you before you get your property settlement actioned.

Family law property settlements have time limits, and if you don’t meet them, you could be in a world of trouble.

So, maybe love isn’t such an easy game to play.

Contact us at JP Family Law & Mediation on 0466 090 434 or visit jpflm.com for more information or to book your initial consultation online.

JP x