The current property market boom has led to unprecedented sale prices and has had unexpected flow-on effects in many areas. One, in particular, we are seeing at Mortlock McCormack Law is the effect it has had on couples going through a separation and trying to reach a relationship property settlement.
It is common practice in relationship property settlements for one party to buy the other out of their share in the property known as the family home. For this to happen, the value of the property needs to be agreed between the parties and this is usually based on a registered valuation. However, valuers are finding that the current market boom is making it difficult to accurately value a property or to ascertain a value that will remain accurate in a month’s time or longer.
Real estate agents have indicated that sometimes properties are selling for $100,000 over the market appraisal. Some parties going through separations are wanting to make the most of this opportunity and sell on the open market.
In the absence of a Court Order to the contrary, sale of the family home must be by agreement between the parties. Often one party wants to remain living in the family home post-separation and does not agree to an open market sale.
This raises the question as to whether the party being bought out of the property by their former partner should be adequately compensated for the loss of opportunity to sell in the current market and the potential of receiving a purchase price higher than the valuations obtained.
The task for relationship property lawyers is to quantify this loss and negotiate a fair settlement in light of an ever-moving market. This is changing the sphere of relationship property settlements at the moment.
If you would like support with your separation or more information about relationship property settlements contact us on 03 377 2900 / email@example.com .