In such a time of uncertainty it can be difficult to know whether continuing with your property settlement is the best way forward, or whether you are better placed to hold out the stop sign and put everything on hold for a while until more is known about where we are headed, including property and job markets.
No one would say that COVID-19 has come at a good time, no time is good for a global pandemic. However for those who are at the final stages of negotiating or ratifying an agreement, COVID-19 is likely to have caused some additional anxiety. Rest assured however that whilst the economic climate has become more unclear at this time, this does not necessarily mean that we should all live in a state of suspended animation, until we resurface through the haze. For some people it may actually be more beneficial to undertake a property settlement at this time. For others it may have little impact. For some there undoubtedly may be impacts that cannot be avoided and must be considered before you sign on the dotted line.
I haven’t started a property settlement as yet, should I wait?
When considering this you should be aware that there are time limitations that apply to undertaking a property settlement, in times of pandemic or normality. If you require the assistance of the court in resolving the issues in dispute, then you normally need to apply to the court within 12 months of a divorce order being made or within 2 years of separation in the case of a de facto relationship. As such if you are nearing your limitation date and have not reached an agreement, you may not have any choice, but to consider making an application to the court without delay.
If you are not nearing a limitation date and have not commenced negotiations in a property settlement, you should first consider the assets you seek to retain as part of a property settlement and how the value of these assets may have been impacted by the current economic climate. Given we are still in the early days, it is difficult to ascertain what impact this virus will have on the values of assets. Whilst we have already seen an immediate drop in share prices for many companies and as a result of this significant reductions in superannuation, the impact on real property values and businesses is largely untested. Depending on what you are hoping to retain from a property settlement, it may in fact be in your interests to undertake a property settlement now.
I am part way through a property settlement, should I put the brakes on?
This is a situation where you really should obtain legal advice on your particular circumstances. If you are relying on professional valuations of real estate, businesses or chattels, which were undertaken some time ago, then you may need to consider obtaining updated valuations before continuing negotiations. Whether this is something you do immediately or whether you wait a few months until the impact is clearer, is something you should carefully consider.
At a minimum you should attempt to update the values of the assets and ensure that these reflect current values. Depending on how the property is to be divided between you and your former partner, it may be that you are both similarly effected and as such the overall percentage division may remain relatively unchanged. However often it may be that one asset has lost value more significantly or quickly than other assets, this may or may not be to your advantage. You should consider the current values of all assets, and how they may have changed from any previous valuations, before ratifying any agreement.
I already have final orders, can then be overturned due to the change in the economic climate?
The answer to this is generally no. If your property settlement is formalised into Consent Orders or a Binding Financial Agreement, then these documents are usually final and enforceable, other than in very exceptional circumstances.
Whilst at first glance a pandemic may appear to be exceptional circumstances, this is not necessarily going to meet the court’s criteria. The main reasons for an order being set aside include if there has been fraud, duress, failure to disclose information or if in the circumstances that have arisen since the order was made it is impracticable for the order to be carried out. Another reason is if there are circumstances of an exceptional nature relating to the care, welfare and development of a child of the relationship and the parent will suffer hardship if the order is not set aside. There are a number of other less common reasons for setting aside orders and a whole different set of circumstances in regards Binding Financial Agreement being set aside, however it should be assumed that these are the exception and not the norm. If you are concerned that as a result of COVID-19 the terms of your orders or Binding Financial Agreement cannot be carried out, then you should seek legal advice before failing to follow them.
So what should I do?
Now more than ever the benefits of mediation and other forms of dispute resolution are clear. Whilst the courts continue to operate, they are prioritising urgent matters and are restricted in regards to their case management processes. Mediations however are still happening regularly by video conferencing and other means. They are proving very effective in facilitating resolution and enabling people certainty in a world where there is currently so little.
Now is not necessarily a time to abandon ship and forget any hopes you had of achieving financial certainty through a property settlement. In most cases there is no reason why property settlements cannot continue to be realised and very well might be something you tick off your list in such a crazy time.
If you are unsure of the best approach for your property settlement you can contact our team for a no obligation discussion about your options. We are continuing to operate through phone and video conference options and if the time is right for you can assist with seeking resolution in at least one part of your life at this time.