If you are in a de facto relationship, there could be significant financial implications for you if you separate, or if your partner (or you) dies.
The principal piece of legislation which deals with the division of property belonging to couples or married couples is the Property (Relationships) Act 1976 (the PRA). Substantial reforms in 2001 extended the scope of the PRA to cover de facto relationships. But what exactly constitutes a de facto relationship in the eyes of the law?
The PRA states that the basic criteria for a de facto relationship are:
- There must be a relationship between two people
- The relationship maybe heterosexual or homosexual
- Both parties must be aged 18 years or over
- They must not be married to each other, although they may be married to someone else, and
- The parties must ‘live together as a couple’.
Living together as a couple
The PRA sets out a list of matters to be taken into account in considering whether two people ‘live together as a couple’. These matters are:
- The duration of the relationship: the longer that two people have been associated together, the more likely it is they will be found to be living together as a couple
- The nature and extent of common residence: two people may live together (in terms of the PRA) even if they do not reside at the same address. But the more time they spend together at the same place, the easier it will be to regard them as a couple
- Whether a sexual relationship exists
- The degree of financial dependence or interdependence, and any arrangements for financial support between them
- The ownership, use and acquisition of property: co-ownership, particularly of the common residence, is a sign of living together as a couple. The same can be said of using property in common, such as a car, and buying items together
- The degree of mutual commitment to a shared life: commitment is an important test of whether there is a de facto relationship. Certain objective criteria such as a common address is important, but there must also be a subjective element of their commitment to a shared life
- The care and support of children: where two people have a child it does not follow that they are necessarily de facto partners. However, children of a relationship will often be relevant in identifying a further level of commitment by the couple
- The performance of household duties; for example, the sharing of domestic duties may indicate a commitment to a shared life, and
- The reputation and public aspects of the relationship; if two people appear together in public and attend events together as a couple this can provide evidence they are a couple.
This is not an exclusive list; any other circumstances can be considered. There will be situations where some circumstances are more relevant than others. Also, no one specific factor is a necessary condition to determine whether or not there is a de facto relationship.
There have been cases where the court has found there to be a de facto relationship even though the two people are not residing together. That said, whilst cohabitation isn’t absolutely necessary for a de facto relationship to exist, it is a very persuasive factor.
What is not a de facto relationship?
Various relationships can easily be identified as falling outside the definition of a de facto relationship. For example, a boyfriend/girlfriend relationship where both people have independent lives and do not cohabit does not have the hallmarks of a de facto relationship, even if it is a close, personal and sexual one.
If two people’s relationship is not a de facto relationship (or they’re not married or not in a civil union) they fall outside the scope of the PRA. If these people have issues relating to property, they must therefore use some other legal remedy to try to resolve their property-related dispute.
The question that often arises in these cases is just when a relationship shifts from being a more casual type of relationship to a qualifying de facto relationship to which the PRA applies. In each case, that will involve a detailed consideration of the above factors, and possibly others.
How we can help
If you need further advice about how the PRA could apply to you, and possible steps you may be able to take to contract out of it, please be in touch.