When you separate, there can be a number of unexpected expenses. For example – if you are required to vacate a shared property, you may need to find a new place to live. Depending on the circumstances of your separation, you may be required to source replacement furniture. If you shared a car, you may need to purchase a new car.
Unless you have a robust emergency fund, you may need to raise funds to meet significant (and unplanned) expenses. If you own property, your first thought may be to sell the property, however a decision to sell is not always as simple as it seems.
When thinking about whether to sell property after separation, you should consider the following:
1. Is the property in your sole name or is it in joint names?
2. Does your former partner agree to sell the property?
3. Will the property be sold at the current market value?
4. Do you need to sell the property now or can it wait until you have sorted out your property settlement?
5. Is the property your primary residence or is it an investment property?
Generally speaking, you should avoid selling assets of value that form part of the matrimonial pool without first obtaining the agreement of your former partner. Even if your former partner is not listed on the title of a property, your former partner may have an equitable interest in the property (depending on the circumstances of your relationship).
You and your former partner should discuss and ideally agree to the terms of the sale, how the net sale proceeds are to be applied and who will be responsible for sale costs (which can include repairs and maintenance involved to prepare a property for sale).
If the property you intend to sell is in joint names and your former partner does not agree, you may need to apply to the Court seeking orders to sell the property and apply the proceeds of sale in a certain way. An application would likely be successful if you can demonstrate that you are in financial hardship and you need to sell the property to meet your reasonable living expenses.
There are also other considerations, such as whether you are entitled to a stamp duty exemption (which may be applicable in your State or Territory if the sale occurs pursuant to a Binding Financial Agreement or Court Orders). If the property is an investment property, you should consider the potential capital gains tax implications.
Selling property after separation is not always straightforward. If you are unsure about whether you should be selling your property, or if your former partner wants to sell property and you don’t agree or you would like clarity around your rights and obligations, you should speak to a family lawyer to obtain advice. Contact Robinson + McGuinness to arrange an appointment on (02) 6225 7040, by email on info@rmfamilylaw.com.au or get started now online with one of our experienced lawyers.