Resolving matters out of court is generally quicker and less expensive than going to court. The separating partners are more likely to follow the agreement and so it might be better for them and their children. This is because they have negotiated an agreement to fit their particular situation.
We think that separating partners should be encouraged to work out their property matters out of court whenever possible.
But to make sure the process is fair and happens efficiently people need four things.
1. People need information about their legal entitlements
People should have access to the following information so they can reach a fair agreement:
- their legal entitlements and obligations under the law;
- different options for resolving property matters out of court; and
- the process for applying to the court, including likely costs and timeframes.
General information is publicly available from different sources including:
- the Ministry of Justice website;
- local Community Law Centres and on their website ;
- local Citizens Advice Bureau and on their website;
- New Zealand Law Society branches and website; and
- the sorted.org.nz website.
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2. People need information about the other partner’s finances
Partners must know what property they each own jointly and individually so they do not miss out on property they might be entitled to.
When people separate, their disputes can be very personal and bitter. Sometimes one or both partners do not provide all the information they should. Unless the partners go to court, there is no way to require the other partner to disclose information.
The problem is sometimes worse where one partner managed the couple’s finances during the relationship. This imbalance in knowledge can disadvantage the other partner.
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3. People need support
Disputes can be difficult to resolve without help.
The most common form of support people have is from a lawyer. Lawyers provide advice and support that is tailored to a person’s particular situation. It is important that people can access legal advice if they need it.
If the partners make an agreement about their property without seeing a lawyer, their agreement could be invalid, because the Property (Relationships) Act 1976 requires each partner to get independent legal advice when making an agreement about their property. We look at the requirements for making a valid agreement here. If the partners do not get legal advice, they could make an agreement without knowing their legal entitlements and the agreement could be unfair.
Some people may not be able to afford a lawyer. Legal aid is available for those on a low income but they may need to pay it back to the Government. Also, it can be difficult in some areas of New Zealand to find a legal aid lawyer.
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4. People to need to resolve property disputes in a reasonable time frame
When property disputes take a long time to resolve, people suffer stress and uncertainty when they want to move on with their lives. The longer a dispute drags on, the longer some people may have no access to, or access to only some of, their share of the property, which can cause hardship.
But sometimes people need to take time to understand their entitlements and avoid rushing into unfair agreements.