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When a couple has separated or are discussing separation, often we are asked, “Can my partner sell the house without my permission?”
Regardless of whether you have been married or have been in a de facto relationship these are the common questions we are asked that you may be looking for answers to yourself. The answers to these questions vary depending on these different situations:
- The home is in both of your names
- The home is in one name and you do not have children
- The home is one name and you have children together
In Australia, these unique scenarios create a range of possibilities, as we’ll unpack below.
Can My Partner Sell the House Without My Permission?
If the Property is in Both Names
If both names are on the property, then both of you will need to provide consent to sell the property. This means you both will be required to sign the agency agreement and contract for sale. So, in this circumstance, your partner will not be able to put the property up for sale without your consent.
If the Property Is In One Name And You Do Not Have Children
If the property is in your former partner’s name, and you do not have children together, then you are only likely to have the ability to pause the sale of the property if you are entitled to a property settlement.
If your family lawyer identifies that you will need to go through the financial settlement process with your ex, then you may be able to pause the sale process from starting or continuing. We’ll explore this below.
If the Property Is In One Name And You Have Children
If you have children together, and the property is not in your name, and the property in question is what has been the family home, then you may also be able to put the sale of the property on hold.
As explored in another topic we’ve written, Who Moves Out When You Separate?, the Court looks poorly upon decisions like selling a home out from under the other parent, if that decision affects the other parent’s ability to effectively provide shelter and care for the children as a result of the sale.
How To Pause or Stop The Sale of the Home
When we’ve had clients come to us out of concern that their former partner will sell the house without their permission, we discuss whether they may be wise to lodge a caveat on the property.
By lodging a caveat, you are flagging that the property may be involved in a future property settlement, where there is a need to separate and divide assets between parties.
A caveat ensures that the property cannot be transferred to anyone else, and the funds of the sale being dispersed. That is, until the caveat is either withdrawn, removed or cancelled.
So, while there is nothing to stop your partner from putting a property up for sale if it is in their sole name, lodging a caveat can be helpful to put a pause on any transfer of title or proceeds for a period of time.
If we see that our client may have some kind of entitlement to the property upon the relationship ending, a caveat may be a wise first step. And if required, we may be able to extend the caveat beyond the initial 21 day period. But, how else might lodging a caveat on the property be worthwhile?
Potential Risks of a Property Sold Before a Financial Settlement
Some additional risks that we see can create significant issues for people include:
- Having to move out of the property sooner than anticipated (due to the sale)
- The property being given away or sold for less than market value to someone else (like a friend or family member); and/or
- The funds of the sale transferred to one person, and potentially squandered.
I want to draw your focus to the second and third points, in particular.
Our priority is to ensure that the value of the asset pool remains the same throughout the property division process, regardless of whether it is resolved through Consent Orders, a Binding Financial Agreement or as Ordered by the Court. We aim to prevent any substantial decrease in the value of the asset pool from the separation date to the finalisation of the property split.
In Australia, the total property pool is to be divided, which is typically expressed as a percentage. For example, you may be likely to receive 45-55% of the property pool. Note: No lawyer should ever express an exact percentage. We can only ever provide a range because family law is such a discretionary area of law.
And here’s what’s so vital for you to be aware of early on…
If, for example, your combined asset pool was $2 million dollars when you separated but is only $500k at the point in time your financial settlement is finalised, then that is all that is available to be shared.
In family law, there is something known as ‘add-backs’, a way to account for assets used during the period of separation by one or both parties. When people have spent joint resources or used property for their own purposes, the Court adds back the value of the asset or funds to take into account the use of joint assets/resources.
Add-backs take into account money spent by either person, including:
- Legal fees (as each person should pay for their own legal fees)
- Excessive spending of money
- Wasting of property or assets
- Assets given away or sold for less than market value
However, the most significant risk is if the asset pool is so diminished that even with add-backs, the combined asset pool is diminished significantly. For example, 50% of a $2 million dollar property pool is better than an adjusted outcome of 100% of a diminished asset pool of $500k.
Once you separate, you can start negotiating the terms of your property settlement right away. If we consider the above example, delaying the negotiations can be detrimental. It’s advisable to seek the assistance of a family lawyer who can inform you of the many issues that most people are unaware of until it’s too late.
Asset & Property Protection Upon a Separation
So, while we have answered the question, ‘Can my partner sell the house without my permission?’, there can be many advantages to lodging a caveat. While lodging a caveat can sometimes be quite an undertaking, it may be one way to help you avoid the issues outlined above.
Importantly, lodging caveats aren’t the only avenue to reducing the risks that are present. In fact, lodging a caveat may not be the best course of action. For example, if it is determined that you are not entitled, then you may be liable for the costs to remove the caveat, and potentially Court proceedings where you may have to pay for your former partner’s legal fees. Another option is seeking an Undertaking (essentially a promise to the Court that is as binding as Orders) or urgent injunction/Orders from the Court to prevent the property being sold or encumbered.
Before any negotiations about the terms of your property split, or anything related to a separation is agreed to, you should always make an appointment with a family lawyer beforehand. An appointment with an experienced family lawyer is the very best way to learn what will be suitable or unsuitable (even catastrophic) for you to agree to, when negotiating your property settlement.
Because Family Law is a complex area of law, there are many ways in which people put themselves in bad positions, despite being some of the most intelligent and worldly people walking around our city. Save yourself the additional money and stress that so often comes with matters like these, and get good advice, early.
Have you recently separated or are you considering separation?
Do you have concerns or questions that you need answers to?
We can help you wherever you are based in Sydney. We have two office locations – Penrith & Blacktown – as well as phone and online consultations if preferred. Reach out to our team on 02 47 222 050.
Disclaimer: The content in this article provides general information however it does not substitute legal advice or opinion. Information is best used in conjunction with legal advice from an experienced member of our team.