Hi there. When a marriage or de facto relationship of at least 2 years’ duration has ended, the parties can divide their property in what is called a ‘property settlement’. The parties can negotiate a settlement without going to court, but if they want the arrangement to be legally binding or if they cannot agree on how to divide their shared assets, they can apply to court for assistance.

There is no set formula used to divide a couple’s property, but the court will consider things such as the direct and indirect financial contributions of each party to the marriage, non-financial contributions, and the future needs of each spouse. The proportion of each person’s share will depend on many factors, including any formal or informal agreements reached when purchasing certain property during the relationship. For shorter relationships, the court will pay particular attention to the original contributions of each party. The court’s ultimate decision will be one that the court considers to be just and equitable based on the facts of the case.

In your situation, the court would consider each person’s original contribution to purchasing the house and any agreement about how the profit was to be shared in the event of a sale. However, such an agreement may not necessarily be enforceable, especially if it was not put in writing or the parties did not intend it to be legally binding. A court may decide that, as part of the property settlement, the minority interest holder is entitled to a larger proportion of the profit than what the other party is claiming. The court’s decision will depend on the overall current financial positions of both parties and their contributions during the de facto relationship.

Note, however, that the outcome will be different if you have previously signed a ‘financial agreement’ (sometimes called a pre-nuptial agreement) with your de facto partner. If you have signed such an agreement and it specifies, amongst other things, how the profit is to be split if the house is sold, then the terms of this agreement will prevail over any alternative claim.

Suggested way forward

Property settlements are not straightforward and the rights of both parties depend on a wide range of factors. You would benefit from speaking to a family lawyer who can advise you of your legal rights and options. By pressing the “Consult a Lawyer” button, LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.