When it comes to property agreements in family law, documenting the terms and conditions is essential for clarity, enforceability, and future reference. Various options are available for recording property agreements by consent, each with its pros and cons. It is essential that a specialist family lawyer is consulted to ensure you are protected from future claims for property settlement.
The best way to formalise your property settlement agreement is by filing an Application for Consent Orders in the Federal Circuit and Family Court of Australia. These orders are legally binding and enforceable, providing certainty and finality. Upon the Order being submitted to the Court, the Court reviews the agreement to ensure it is just and equitable for the Orders to be made as agreed. Consent Orders provide the parties a clear and definitive resolution to property matters, reducing the likelihood of future disputes or litigation. Once the Consent Orders are approved it is challenging to amend or modify the agreement without the approval of the Court.
Binding Financial Agreements (BFA) are private contracts entered into by parties without court involvement to document a property settlement agreement. As the BFA does not need to be approved by the Court the parties have greater control over the terms and conditions allowing for customisation to suit their specific needs. Both parties require independent legal advice prior to entering the agreement. BFA’s are subject to strict formal requirements pursuant to the Family Law Act 1975 (Cth) and failure to meet these requirements may render the agreement unenforceable. The Court also has the discretion to set aside or vary a BFA if they consider it is unfair or unconscionable.
An informal agreement is an understanding reached between the parties without formal documentation. While this option may be suitable for amicable separations, it carries inherent risks. Many separating couples may be drawn to this option as there are no legal fees associated with drafting or formalising an informal agreement. Without the agreement being formalised there is no legal recourse if one party fails to comply with the agreed terms. It also leaves room for interpretation or disputes leading to potential conflict in the future. If your agreement is not formalised either party may make a claim for property settlement in the future. Parties have 12 months from the date of divorce or two years from the breakdown of a de facto relationship to make a claim for property settlement. In some cases, a claim can be made outside of these timeframes.
Recording property agreements in family law is crucial for clarity, enforceability, and protecting the interests of both parties. Seeking specialist family law legal advice is strongly recommended to ensure compliance with the law, protect your rights, and achieve a fair and workable resolution for all parties involved.
