Am I in a De Facto Relationship?
June 14, 2020
Many couples unwittingly end up in qualifying de facto relationships without considering the implications under the Property (Relationships) Act 1976 ('the Act').
The Act dictates how property is divided when a qualifying relationship breaks up. This includes marriages, civil unions and some de facto relationships.
A de facto relationship is defined in section 2D of the Act as a relationship between two people who are over 18, who live together as a couple, and are not in a marriage or civil union.
The concept of 'living together as a couple' involves many factors such as childcare responsibilities, shared finances, public perception of the relationship and even how you divide your household chores. A couple may be in a de facto relationship even if they do not physically live together.
Once parties have been 'living together as a couple' for three years, the default provisions of the Act will apply, unless the parties have contracted out. In certain situations, a relationship will come under the regime before the three-year mark, for example where the parties have had children together.
There is a presumption under the Act that all relationship property will be shared equally. Relationship property is broadly and includes many items that you may not anticipate are relationship property, for example contributions to and the increase in value of your Kiwisaver account since the relationship began.
Separate property can be converted to relationship property, for example where parties move into a home owned by one party, it may become the relationship home and become subject to the equal sharing provisions.
It is important to consider these issues early on in a de facto relationship, before parties unintentionally become subject to the Property (Relationships) Act regime. The implications can be significant, particularly where there is a house involved.
You can contract out of the Act at any time before entering, during, or after ending a de facto relationship - but certain formalities must be complied with for an agreement to be valid. B oth parties must have their own lawyer, who independently advises them on the agreement, and certifies that they have done so.
If you would like advice on a contracting out agreement or your entitlements under the Property (Relationships) Act 1976, contact our team at email@example.com to discuss your individual circumstances.
Disclaimer: The information contained in this article is general in nature and not tailored to your personal circumstances. It is only current as at the date posted and should not be relied upon as legal advice. If you require legal advice, please contact us for further assistance.