Attwood Marshall Lawyers Family Law Senior Associate Hayley Condon discusses what happens when a couple calls it quits, but neither can find suitable alternative accommodation to be able to move out of the family home. This is a reality for many former couples during the rental crisis, rising interest rates, and housing shortages we are currently facing across the country. Sometimes the only option is for the couple to stay in the family home together.
The current housing crisis is certainly not something anyone needs to add to their list of worries when facing the breakdown of a relationship. The sad reality is that this is a real issue at the moment, and it is making what is already a very unpleasant situation worse for those who are wanting to move out of the family home after separating from their spouse.
Separating couples are being forced to live under the one roof for extended periods because they cannot secure housing to be able to move out of the home after a separation.
You can imagine how challenging this could be for both parties involved. Not all separations are amicable, most are not, so being forced to continue to live under the one roof and not having your own space away from the now “former spouse” can be a pressure cooker for everyone involved.
If this situation arises, there is a silver lining. For couples who separate amicably or can manage to keep a lid on their emotions and live like flatmates, this arrangement can have its benefits, including:
- Maintaining the status quo in terms of the financial support of the family until property matters are resolved. Many couples will continue with the same financial arrangements that existed prior to separation in terms of the support of the family and payment of bills.
- Separating couple are only meeting the cost of maintaining one household rather than two – which could have added more pressure to the situation especially if the separating couple were only living off one income.
- This arrangement delays the decision of who remains in the home and who moves out.
- If there are young children involved, with both parents remaining under the one roof, the arrangement may assist the children adjust to the separation and the new family dynamic.
Does remaining under the one roof delay the divorce process?
It is important to draw a distinction between a divorce which is simply the dissolution of a marriage, and the resolution of property settlement or parenting arrangements for children.
Where a separating married couple reside has no impact on resolving the longer-term parenting arrangements for children or reaching a property settlement agreement. It does, however, impact the process of dissolving a marriage.
Living separately and apart under one roof will not prevent a spouse from applying to the Federal Circuit and Family Court of Australia for a divorce after the former couple have been separated for 12 months. However, evidence must be put before the Court to satisfy the Court that the parties were truly separated for the 12-month period immediately preceding the filing of the divorce application.
This generally requires the filing of an Affidavit by the applicant spouse or both spouses if it is a joint application and the filing of an Affidavit by an independent witness (often a family member or close friend) deposing to the changed living arrangements of the married couple after their separation.
The following evidence is normally put before the Court to prove separation under the one roof:
- Changed sleeping arrangements – the spouses sleeping in separate bedrooms or if the house is large enough, one party living in another part of the house.
- There has been no sexual activity.
- A reduction in shared activities or family outings, such as not sharing meals together.
- There has been a decline in performing household duties for each other, and these are now being performed individually.
- A division of finances, for example the spouses no longer sharing a joint bank account.
- Any other factors that can show the marriage has broken down, including how the relationship is presented to family members and friends, and that the spouses no longer appear as a couple in social situations.
Who gets to stay in the house for the long term?
One of the most contentious issues many couples face when they decide to go their separate ways is who is going to retain the family home and what does that mean for the other spouse when dividing up the property of the relationship.
This issue has only been amplified by the rising cost of living, repeated interest rate rises, and of course the rental crisis where finding suitable accommodation is more difficult than ever before.
There is no formula that exists under the Family Law Act to decide which spouse retains the family home. If there was, it would make the resolution of this issue much easier.
The house, along with the other assets, liabilities and superannuation held individually or jointly by the spouses, form part of the relationship property pool which is divided as part of a property settlement.
A property pool will normally include:
- The family home
- Money held in bank accounts
- Household and personal items such as furniture, jewellery, motor vehicles.
- Cryptocurrency, which is a new type of property being invested in.
Debts of the relationship will also be factored in, including the mortgage and other loans.
Some couples may be able to come to an agreement between themselves as to who will keep the house, and how other property of the relationship will be divided, but if they cannot agree then the decision as to how the property pool is to be divided and who retains the family home will have to be determined by the Court.
Litigating a family law matter through the Court is a costly process and separating couples should not underestimate the stress, time and energy that needs to be invested in the process. If separating couples can resolve property matters between themselves either after receiving legal advice or with the assistance of legal advisors, that is the best outcome for all involved – particularly children of the relationship.
How does the Court decide how to split the property pool?
When making property orders, the Court applies a five-step process to determine the entitlement of the spouses.
1st Step: Determining whether it is just and equitable to make property orders. The Court is not required to make a property settlement order simply because a married or de facto couple has separated, only if it is just and equitable to do so. For example if the parties’ own joint property, have children or have been together for a lengthy period of time, then it would be just and equitable for the Court to make property Orders.
2nd Step: Identifying what property is held by both parties individually and jointly and the value of the property to determine the property pool.
3rd Step: Considering the contributions made by both parties during the relationship and after separation. This involves an assessment of the financial and non-financial contributions of the parties and contributions made to the welfare of the family (such as parenting of children and homemaking).
Financial contributions may include income, gifts and inheritances received. Non-financial contributions may include caring for a spouse during a serious illness or unpaid work such as for a family company or undertaking renovations to the home.
This assessment is not undertaken by the Court with mathematical precision and involves the Court looking at the contributions of each party as a whole, both during the relationship and post separation, and assessing the contribution-based entitlement of each party as a percentage of the pool.
4th Step: Assessing the future needs of both parties and whether a percentage adjustment should be made in favour of either party as they have greater future needs. There are several factors that will contribute to determining if an adjustment should be made in favour of a party on account of greater future needs including:
- their age
- their health status
- their income earning capacity and any disparity that exists between spouses,
- care of children under the age of 18 years; and
- any commitments either party has to support themselves or a dependent, amongst other considerations.
5th Step: The Court considers the decision it has arrived at and whether it is a just and equitable division of assets. A Court may determine that further adjustments are required.
As part of this process the Court will determine each party’s percentage-based entitlement of the asset pool and what property they will receive from the pool to make up their entitlement. This includes who retains the family home or if it is to be sold.
Attwood Marshall Lawyers – Helping people navigate separation and divorce
Whether you are leaving a relationship amicably, or not, it is important to get legal advice early on to understand the important issues that you will need to consider as you navigate your way through separation.
If you suspect there will be a dispute over property, or you and your former spouse cannot agree on who should move out, it is important to obtain advice from a family lawyer to help you negotiate effectively and hopefully come to an agreement without the matter escalating to Court where the decision will be made for you.
Attwood Marshall Lawyers have a dedicated team of family lawyers who practice exclusively in this complex and emotive area of law. It is our intent to reduce conflict as much as possible and to protect the best interests of our clients. Our lawyers can help with all aspects of family law and will remain available throughout the Christmas/New Year period.