Why is there a need for property mediation in times of family separation? This article will explain how property mediation works and the effect of failure to do so.
The decision to separate is rarely easy. It’s a storm that tears through the fabric of a family, leaving behind emotional and financial uncertainty. That’s why mediation is a necessary tool to sort out the knots of property and financial issues that you may have in the event of a separation.
What Is Property Mediation?
Property mediation is a process of reaching an agreement between you and your ex-partner regarding parenting or property concerns without going to court.
This is a form of alternative dispute resolution (ADR) that helps separating couples resolve disagreements over property and financial matters without going to court.
It involves a neutral third party, called a mediator, who facilitates communication and guides the couple towards a mutually agreeable outcome. Property mediation or settlement covers the following:
- real property, such as houses and land
- businesses, companies or trustsvehicles, such as cars, motorbikes, caravans and boats
- superannuation, shares and other financial products
- pets
- furniture and household items
- jewellery and other personal belongings
- cash.
It can also include debt payment arrangements, particularly:
- mortgages
- personal loans
- buy now pay later debts
- car loans and leases
- credit card debt
- unpaid taxes
- household bills.
How Property Mediation Works
How does mediation work? Here’s a brief overview of the process:
1. Intake. The couple meets with the mediator individually to discuss their needs and goals.
2. Joint sessions. The couple meets with the mediator together to discuss their assets and liabilities, identify areas of disagreement, and explore potential solutions.
3. Negotiation. The mediator facilitates communication, helps the couple understand each other’s perspectives, and encourages them to find common ground.
4. Agreement. If the couple reaches an agreement, the mediator will draft a memorandum of understanding or consent orders, which can be filed with the court. However, if you don’t want to resort to property mediation, you can always choose to agree with your ex-partner and:
- Keep your agreement informal
- Make a binding financial agreement (BFA)
Note that you can always apply for consent orders to the Federal Circuit and Family Court of Australia or Local Court of NSW.
Consent orders are court orders that reflect the agreement between you and your ex-partner about property and maintenance. They are legally binding just like orders made by a Judge after a contested hearing.
However, before doing so, getting independent legal advice first is the wiser move. Consent orders will finalise your property and maintenance matter so that you don’t come back to court. Thus, legal advice would go a long way because there are only limited circumstances where you can apply to the Court to change the orders.
Requirements for Property Consent Orders
Before parties can obtain property consent orders, these requirements must be satisfied:
- An application for consent orders must be made within 12 months of a divorce or two years of the breakdown of a de facto relationship (leave of the court will be required to file for consent orders beyond this timeframe).
- For de facto couples the court must be satisfied that the parties were in a de facto relationship for at least two years, or there was/is a child of the de facto relationship.
- One of the parties to the relationship must be living in Australia or have a significant connection to Australia. A significant connection to Australia may include children who are living in Australia.
Property Mediation for Married and De Facto Couples
Married couples can initiate a property settlement mediation even if they haven’t applied for divorce yet. As for de facto couples, mediation can only be done if:
- you were in a relationship for least 2 years
- you have a child together
- your relationship is or was registered under a prescribed law of a State or Territory, or
- one or both parties have made substantial contributions which would lead to serious injustice if any order was not made.
Also, you must have a geographical link to the Courts jurisdiction. You and your ex-partner must currently live in Australia, or you were living in Australia when your relationship broke down.
Effect of Failure to Mediate
If parties involved in a property mediation in Australia fail to reach an agreement, the dispute will remain unresolved and may proceed to court. Mediation is relatively cheap compared to litigation, and it is encouraged by the judiciary in Australia.
This leads the parties who are unable to agree on the property and financial aspect to the last resort – litigation. Litigation means that the family court will determine how the parties’ property and finances will be split post-separation. While the court can take into account the parties’ preferences when making orders, by law the court cannot make the order unless it considers it to be just and equitable.
A family lawyer can provide legal advice and assist you with the entire court process, from drafting and filing your court documents to representing you in court. At this stage, legal assistance from a competent lawyer is a must because you will be undergoing various family law proceedings that require their skills and expertise.
At the end of the litigation process, the Court can make a wide range of orders, including orders:
- to transfer ownership of property to another person
- to sell the family home
- dividing personal property
- splitting superannuation
- for one person to pay the other person a sum of money.
Also, keep in mind that there are time limits set for applying for property orders:
- married couples have 1 year from the date their divorce order comes into effect
- de facto couples have 2 years from the date of separation.
Obtain Independent Legal Advice from JB Solicitors
Dealing with family separation and property division can be incredibly complex and emotionally challenging. An experienced family lawyer will have a thorough understanding of the Family Law Act.
With JB Solicitors’ legal expertise and guidance, we can help you protect your rights and interests, minimise stress and conflict, and provide family dispute resolution services that work for you.
Seek legal advice and contact our family dispute resolution practitioners or family lawyer today.
