Don’t Delay Your Property Settlement
Whilst the Covid-19 pandemic saw house prices in parts of Australia go through the roof, it is predicted that with interest rate hikes and the ‘cost of living crisis’, that values may plunge in 2023.
Parties who have delayed resolving their property settlement may be regretting not having listed their home for sale before now.
It’s vital during any separation that you don’t delay. In a recent case, a husband and wife had delayed their property settlement until six years after separation.
The judge was critical of both of them and said the lapsing of time since separation had increased the complexity of resolving an otherwise straightforward matter.
In that case, the wife had the advantage of remaining in the home, but she had also run up substantial debts.
The husband on the other hand had made use of assets in his sole control and spent approximately $150,000 on expenses which included a luxury holiday for him and his new partner, school fees and legal expenses.
The husband had also “gifted” the parties’ eldest son $200,000 to put towards buying a unit in the son’s name. The son had lived with the husband since the separation and the husband said it was “unreasonable” of the court to include their son’s unit in the property pool available for distribution.
The judge noted that neither the husband nor the wife called evidence from the son, which was an “omission of a basic and fundamental step”.
The court did not take into account the current value of the unit but did take into account the $200,000 “gift” as representing the parties’ interest in the unit.
Additionally, the court took into account $100,000 of the $150,000 spent by the husband and noted that it largely offset any percentage adjustment the husband would have otherwise been reasonably entitled to under the “future needs” percentage component.
The wife was also allowed to include as a liability in the property pool the debt she had accrued post-separation.
The court determined that the assets be split 55 per cent, 45 per cent in the husband’s favour which was mainly due to the husband having made a more significant “initial contribution”.
If so much time had not elapsed, the husband may have received a greater percentage adjustment.
When valuing real estate, either the matrimonial home or an investment property, it may not always be wise to jump straight into getting a valuation from a registered valuer.
If one person believes the value in the registered valuer’s report is incorrect, or has changed – as property prices have changed post-COVID – it can make ongoing negotiations difficult. You may also need to get an updated valuation report at a later time which will incur further fees.
You may decide to first obtain n appraisal from a real estate agent, or several real estate agents, which will give you an idea of the average worth of the property.
Courts are always in favour of property settlements being done and dusted as a soon as possible.
If you’d like advice on property settlements, separation, or any other aspect of family law, please call Michael Lynch Family Lawyers on: (07) 3221 4300 or email: [email protected] Our team of family law experts are here to help you.
