One of the increasing areas of work for lawyers is the drafting and advising on Agreements contracting out of the Property (Relationships) Act.

Since February 2002 the property rights of both married and de facto couples (where the de facto relationship and/or marriage has lasted three years) have been governed by the same equal sharing rules in the Property (Relationships) Act. 

Under the Act  relationship property is divided equally between a couple who have been in a three year relationship unless there are extraordinary circumstances that make equal sharing “repugnant to justice”.  It will not be easy to satisfy the Court that relationship property should be shared unequally. 

There are many occasions when the equal sharing rules appear inappropriate.  Clients who may be in a second relationship - often with children from an earlier relationship - try to balance their obligations to a new partner /spouse and their children.  Often couples enter these relationships on the basis of “what is yours is yours and mine is mine”.

We meet younger couples where one is contributing more to the purchase of a house than the other.  The person who is contributing the greater sum may be concerned to protect that greater sum in case of relationship difficulties.

The Act provides a mechanism to enable a couple to make their own rules governing their property interests.  This works on an “opt out” system. If a couple do nothing – that is if they do not make an Agreement – they will be covered by the equal sharing rules after the three year period.  If they wish to avoid those rules then they must make an Agreement.

The Agreements have certain procedural requirements.  They must be in writing and each of the couple must be independently advised by separate lawyers. 

If the procedural steps are followed then a Court can only overturn an agreement if enforcing the agreement would cause “serious injustice”. It is then important to update the agreement from time to time.  An Agreement that was fair at the beginning of a relationship may not be fair after a number of years and particularly where there are children.

We are also meeting parents who are using Trusts to try and protect property from claims arising which their children may face upon a separation.