24 Jul 2019
Review of the Property (Relationships) Act 1976
The Law Commission (Te Aka Matua o te Ture) has completed its review of the Property (Relationships) Act 1976 (PRA) and its report to the Minister was tabled in Parliament on 23 July 2019.
The report concludes that the fundamental rule of equal sharing and its application to marriages, civil unions and de facto relationships that last for three years or more, is sound.
However, the report makes 140 recommendations for reform, including:
- Introducing a new statute, the Relationship Property Act (the Act).
- Changing how the family home is classified. The Commission recommends that if the family home was owned by one partner before the relationship began, or was received as a third party gift or inheritance, only the increase in the value of the home during the relationship should be shared.
- Simplifying the eligibility criteria, particularly in respect of de facto relationships which currently are subject to a three-year duration requirement before the law applies to them. The Commission recommends changes to make it easier for de facto partners to know when their relationship is subject to the Act.
- Replacing both the court's compensatory powers under s 15 PRA and maintenance under the Family Proceedings Act 1980 with Family Income Sharing Arrangements (FISAs). A FISA would provide for both partners to share income for a limited period following separation to ensure the economic advantages and disadvantages from the relationship or its end are shared more fairly. The amount and duration of a FISA should usually be calculated by a formula that takes into account the partners' incomes before separation and the length of the partners' relationship.
- Giving the courts greater powers to divide trust property when a trust holds property that was produced, preserved or enhanced by the relationship.
- Giving greater priority to the children's best interests in relationship property matters, including greater rights to occupy the family home immediately following separation.
- Improving the way relationship property matters are resolved in practice. The recommendations address behaviour that causes delay and increases costs.
The Commission recommends that the rules that apply to relationships ending on death should be considered within a broader review of succession law.
