The Ex-Files: Jeremy Sutton on separation where one party purchases the family home off the other

An official valuer should be used when one party wants to buy the house off the other in a separation. Photo / 123rf

OPINION:

Q: I am going through a nasty separation. We have not talked to each other for nine months. My ex wants to buy me out of the family home, and is trying to say that she should get a discount on the price to consider real estate commission. Is that right?

My ex's brother also did the property valuation. The valuation was done in my sister's presence, but not mine. I think this is quite unfair.

My ex says she wants to settle the separation in two years. Is that normal?

I am worried she will never buy me out but will stay on the property. What can I do to protect myself? She has taken all of our family photos and my parents' antique art collection that they gifted to us.

A: The court will generally favour one party retaining the property if they are able to pay out the other party to the relationship.

Allowing one party to purchase a property could also mean that a settlement occurs earlier, as you do not have to wait for a sale to a third party. However, a settlement of this kind is only permitted on certain terms.

Should there be a discount on the purchase price?

Firstly, the law is clear that the party purchasing the property is not entitled to a discount simply because there is no real estate commission in a private sale.

The property must be purchased at the current market value. This is usually determined by a registered valuation.

If your ex's brother is a registered valuer, his valuation can be used. If you do not think it is accurate, you could obtain your own registered valuation. Where there are two different valuations, the median value is often used.

Is a two-year settlement period normal?

The law generally supports a clean break principle, which enables parties to a relationship to move on without ongoing ties to their ex-spouse or partner.

If the matter goes to court, it is unlikely that a judge will support a two-year settlement period. It is a lengthy period of time.

If you are entering into an agreement, then it is possible to have a deferred settlement of two years. That said, I do not think that waiting for two years is favourable.

However, if you were going to agree to this, you could seek more money than your ex has offered, as you will not receive the funds for two years. There are other clauses that your lawyer can suggest to protect you.

Say I decide to settle. How can I protect my position?

If you were worried your ex may back out of the settlement agreement, then there are also penalty and/or enforcement provisions which could be included in your agreement to protect your position.

The other alternative is that you can suggest the property be sold on the open market. If your ex does not agree to this course of action, you could apply to the Family Court to sell the property.

It will be up to the judge as to whether the property should be sold or whether your ex should be allowed to purchase it. The downside of this option is that there will be significant costs involved, and it could take up to 18 months for a decision.

Your ex will breach the settlement agreement if they do not buy you out as promised. Your contract will protect you here.

I wish you all the best as you work towards a resolution.

• Jeremy Sutton is a senior family lawyer, specialising in divorce cases where there are significant assets, including family trusts and complex business structures.