The Property (Relationships) Act 1976 ("the Act") applies to marriages, civil unions and de facto relationships. Generally under the Act, at the end of one of these relationships, the parties receive a 50:50 share of all the relationship property. This usually includes the home, family chattels, and all other property acquired during the relationship. However the Court does have the power to award a lump sum payment or order the transfer of relationship property from one party in the relationship to the other under Section 15 of the Act.
Section 15 applies when at the end of the relationship, the income and living standards of one party are likely to be significantly higher than the other party's because of the effects of the division of functions within the relationship while the parties were living together.
One of the most common situations where Section 15 can apply is when a wife has stayed at home to look after the children for 20 plus years, while the husband has been working and rising up the ranks in his job and acquiring experience in his profession. When the parties separate, the husband usually has very high earning potential due to his accumulated work experience. The wife, on the other hand, is usually limited in her employment options due to being out of the workforce for many years and is therefore likely to have significantly lower income and living standards compared to the husband once the parties split and divide the relationship property in half. For example, one party gave up their career so the parties could have children and the other party could reach their full potential.
In such cases, the Courts have used Section 15 as a tool for compensation for the loss of income and living standards due to this division of functions.
Relationship property is a complicated issue and can also be an intense and emotional time for all parties involved. If you have any questions about relationship property, want to know what your fair share is and what you can do about it, please contact at our Auckland Office either: