I'm sorry to tell you, I have seen situations where a couple have agreed to split the proceeds, but the legal owner has sold it to one of their relatives for well below market value to decrease their partner's proceeds from the sale.
Your other potential problem is that proceeds from the sale would initially be at her disposal. While you are legally entitled to half, it is difficult (and sometimes impossible) to recover the money if it has been spent or sent off-shore.
Can you protect your interest in the home?
Yes, there are steps you can take. This is a technical area of the law and I can't explain it fully here. You should engage a lawyer who is highly experienced, and who can represent you if you need to go to court. There are two options:
1. A collaborative approach with your partner
If your partner is willing, the two of you can agree that the sale proceeds will be held in her lawyer's trust account until a settlement agreement is reached. To make this legally binding, your lawyer would obtain written confirmation from her lawyer. This is called an "undertaking", i.e. your partner's lawyer undertakes to hold the money until you and your partner agree on how it should be divided. This will give you peace of mind that the funds are safe, while still enabling the house sale to go through.
2. Notice of Claim and Court Order
If you can't get hold of your partner, or have real concerns about your property, then you can take action, unilaterally, to protect it.
The first step is to prevent the immediate sale of the home by putting a notice of claim on the title of the property. This registers your name as an interested party on the certificate of title, in the same way that a bank registers its interest when its has a mortgage over a property.
If you have a notice of claim in place, the property cannot be transferred to another party (including by way of sale) without your consent. This is an initial stopgap measure that can be put in place fairly quickly, until the parties are able to agree or resolve the matter permanently. But that does not always settle matters.
Once your partner has received notification of the registration of the notice of claim on the title, they may apply to lapse your notice of claim – that is, to have your notice removed.
The only way for you to prevent this is to obtain an Order from the Courts before the lapsing period in their notice has expired. The Order then needs to be lodged with Land Information New Zealand (LINZ), the entity which deals with all land registration matters.
To obtain the Order, you would request a court hearing with a judge, who will decide whether you had grounds to lodge your notice of claim - i.e. whether it is valid and should be upheld. If it is upheld, then the property cannot be transferred until you and your partner can agree as to how the sale proceeds are to be dealt with.
It sounds complicated, but not for a lawyer, and it is a sequence that needs to happen very quickly. If your partner is intent on taking all the proceeds from the property, you may only have a short window in which to lodge the notice of claim correctly.
Is lodging a Notice of Claim a good course of action?
I strongly advise people to try and maintain a good relationship with their partner, because this facilitates a quicker, lower cost settlement. Lodging a notice of claim can have an impact on the goodwill between you and your partner. But in saying that, deciding whether to lodge a notice of claim is ultimately about balancing costs and risk.
On the cost side, going to court is expensive. You could be looking at $10k in costs, just to have your notice of claim upheld. This is before you have even started your relationship property settlement.
But, a notice of claim is a necessary step to preserve and protect your entitlement. It will give you immediate peace of mind that you will get your share of the relationship property, provided you are able to back up your claims in court.
But in reading between the lines of the situation you are describing, you have a lot to lose. If you believe your partner might take the money out of the country, putting a notice of claim on the property is the best course of action for you. The benefits of protecting and preserving your property will outweigh the costs of lodging a notice of claim.
Summary
Being legally entitled to a share of relationship property does not guarantee that you will get your fair share. You can still run into problems – and you need to solve them swiftly - when you are not a registered owner.
If you're concerned that your partner won't give you the share of your home that you're entitled to, you can register your interest to prevent it being sold without your consent.
This is a specialised area of the law, and because events can move quickly, you might only have one chance to make sure your property is protected. Your legal representation should be someone experienced who can field any curve balls in this process.
While it is best to stay on good terms with your ex, it is crucial that you take steps to protect and preserve yourself and your assets, so you can start your new life in the best financial position.
- Jeremy Sutton is a senior family lawyer, specialising in divorce cases where there are significant assets, including family trusts and complex business structures.
