Improving law for dividing property when relationships end
The Law Commission has published its proposals to reform the law about dividing property when relationships end. It is seeking feedback on the proposals before making its final recommendations to the Government in 2019.
The Property (Relationships) Act 1976 (PRA) sets out the rules for how property is to be divided when relationships end.
The Law Commission is reviewing the 42-year-old law. Last year, the Commission published an Issues Paper, and asked the public to comment on whether they thought the law was working well in contemporary New Zealand. Many of those who commented thought some aspects of the law needed to change.
The Law Commission has had the benefit of a survey of public attitudes and values, carried out by the University of Otago and funded by the Michael and Suzanne Borrin Foundation. The results of this survey have given the Commission valuable information about how New Zealanders think couples should share their property following separation.
The Law Commission has now published a Preferred Approach Paper - Review of the Property (Relationships) Act 1976: Preferred Approach: Te Arotake i te Property (Relationships) Act 1976: He Aronga i Mariu ai. In this paper, the Commission sets out its preferred approach on the key issues arising from its review of the PRA and asks for feedback on them.
The Law Commission presents a package of reforms designed to achieve a law that meets most New Zealanders’ expectations of fairness when a relationship ends. Key proposals include:
1. The family home should no longer
always be shared 50-50. Instead, if one partner owned the
home before the relationship, only the increase in value
during the relationship should be shared. Homes acquired
during the relationship will still be shared
2. People who have children, have been together for 10 years or more, or who have built or sacrificed careers because of the relationship should be eligible for Family Income Sharing Arrangements or “FISAs”. Under a FISA, the partners would be required to share their combined income for a limited period after they separate, to ensure the economic advantages and disadvantages from the relationship are shared more fairly.
3. A court should have greater powers to share trust property when a trust holds property that was produced, preserved or enhanced by the relationship.
4. The rules should continue to apply to all marriages, civil unions and de facto relationships lasting three years, unless the partners enter into a contracting out agreement.
5. Partners should still be entitled to share equally in all relationship property, subject to limited exceptions.
6. Children’s best interests should be given greater priority under the PRA. This includes giving the primary caregiver of children a default right to stay in the family home in the period immediately following separation.
7. A range of measures to promote the just and efficient resolution of PRA matters and to address behaviour that causes delay and increases costs. This includes making sure partners properly disclose to each other all relevant information about their property, whether or not they go to court.
8. Developing a comprehensive information guide for separating partners that explains the law and provides information about the different options available for resolving a dispute. Funding for community organisations to provide person to person support should also be considered.
“Dividing property when relationships end is often a challenging task, and one which typically comes at a time of emotional upheaval. Partners should be helped at this time by a law that is clear and that accords with what most New Zealanders would think is fair” says Commissioner Helen McQueen. “We have developed a package of reforms that we think reflects those expectations and updates the law for contemporary New Zealand.”
The Paper can be downloaded at https://www.lawcom.govt.nz/our-projects/review-property-relationships-act-1976
and feedback can be given until 14 December 2018. The Law
Commission will publish its Final Report in