Real Estate Agents and Family Law
Posted: 18th March 2015
Posted in: News
Posted by: Dean Evans, Partner
Real estate agents are an integral part of the family law process.
Agents work closely with couples who have separated. Their role in bringing about finality where parties have been through a protracted court battle is vital.
Our advice to real estate agents when engaged by parties to a family law matter is to proceed with caution.
- Ensure that all advice is put in writing.
- Make every attempt to remain impartial.
- Do not make any assumptions as to the parties being in agreement.
- Where there are Court Orders in place, request details of the Orders that set out how the sale of the property is to occur – this will give you a step-by-step guide.
- Where there is no agreement, refer back to the parties’ respective lawyers. They are officers of the Court firstly and are bound to give effect to the Orders.
When we draft Orders for the sale of a property, our goal is to see the matter reach a conclusion and to ensure that the matter does not need to go back before the Court.
Why do parties need Court Orders if they are in agreement?
The first reason relates to tax savings.
If a property is to be transferred to one party, Family Court Orders may result in the parties being eligible to a stamp duty exemption. This is also the case with capital gains tax, in that the transferring spouse incurs no capital gains tax debt on their transfer of the property to the other party.
The second reason is that Court Orders provide finality and certainty. We often act for parties who are in complete agreement and still elect to finalise their property settlement using Consent Orders.
Given the volatility in the share and property market in the last 7 years, this is particularly important.
There have been a number of cases where parties have sought to revisit a property settlement due to the volatility of the property and share market. Such attempts are not normally successful where there are Orders in place.
This past week, social media has been alive with commentary about the United Kingdom family law decision in Wyatt & Vince, where the Wife commenced proceedings 23 years after the couple’s divorce and 30 years after the conclusion of a very short relationship. At stake was the Husband’s GBP100 million wealth – all accumulated post-separation. The Husband applied to the Court for an Order summarily dismissing the claim as being too far removed from the wealth accumulation and too late in time. He won, however, an Appeal has determined that the lower Courts were wrong to have summarily dismissed the claim. Like many, we ponder whether this would happen in Australia. Read more here.
When will the Court Order the forced sale of a property?
One party may be of the view that there is a strong need to sell a property without all the financial issues being dealt with by the parties. The other party may be vehemently opposed to such action and see it as the other party attempting to use their superior resources to force them out of the family home.
Financial circumstances may not permit the continued retention of a property.
A party may apply for an interim Order that the property be sold. That party would need to support their position with adequate evidence in support to warrant the Court taking such action on an interim basis.
- The party’s affidavit in support would need to address such matters as to:
- Whether there had been any action taken or foreshadowed by the mortgagee in respect of the property.
- Consideration of the property pool as a whole.
- Consideration of the parties’ income and ability to service any debt.
- Whether any outstanding council and water rates.
- The likely sale price and best approach to marketing the property – normally support by an affidavit from a real estate agent.
If warranted, the Court will then make an Order that the property be put on the market to avoid the mortgagee taking action under the mortgage. The Order will also appoint a specific Real Estate Agent and a conveyancing solicitor. The balance of funds after the sale and payment of expenses are normally held in one of the family law solicitor’s trust account.