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De Facto Relationship or Just Good Friends?

De Facto Relationship or Just Good Friends

Many seniors enter into relationships late in life, seeking companionship and mutual support. The thought a legal relationship, with property sharing implications may arise, often never enters their minds. Unfortunately, we are living in an age where the law seems determined to stick its nose into peoples’ personal lives whether it is wanted or not.

Some years ago a client, aged ninety years, called into my office and asked me whether he needed a contracting out agreement under the Property (Relationships) Act 1976. I was rather surprised at the question as old Dan (as I’ll call him) was a widower who had lived on his own for a number of years. He went on to tell me an old family friend, a lady of eighty-seven years of age, had just moved into his home unit. She was a widow with her own house, but Dan’s unit was warmer and closer to the shops and doctors, and they had decided they would enjoy the company arising out of sharing the unit. “You have no idea how nice it is to have someone to talk to in the evenings again,” Dan told me.

Neither Dan, or his lady friend, had any interest at all in the property of the other, but they were both concerned at what a family member, with an unhealthy interest in acquiring money, might do if either of them died or went into a rest home, and there was any doubt over who owned what.

I advised Dan that relationship property implications would only arise if they married or were living in a de facto relationship. They had no intention of marrying, so the only real issue was were they living in a de facto relationship, or was the current arrangement ever likely to become one as time went by? We had a look at the legal definition of “de facto relationship.”

The legal definition in the Property (Relationships) Act starts off by saying it is a relationship between two persons who are over eighteen years of age, live together as a couple, and are not married or in a civil union with each other. This part seems quite simple although in one reported case “living together” was taken to include a situation where one party worked overseas and the couple only physically lived together during relatively short holiday periods each year.

The Act then goes onto say, when looking at the above factors, all the circumstances of the relationship are to be taken into account, including:

  • The duration of the relationship
  • The nature and extent of common residence
  • Whether or not a sexual relationship exists
  • The degree of financial dependence/interdependence/arrangements for financial support
  • The ownership, use and acquisition of property
  • The degree of commitment to a shared life
  • The care and support of children
  • The performance of household duties
  • The reputation and public aspects of the relationship

After setting all these matters out, the Act goes on to say none of these criteria have to be present, and a judge can give them what weight he/she wishes and can have regard to basically any other matter the judge thinks is appropriate. Accordingly, the statutory provisions hardly give you a clear definitive answer in all circumstances, if in any at all.

In the case of Dan, my ninety-year-old client, I was pretty confident his arrangement was not a de facto relationship, but I could not be one hundred percent sure. In the end we took the conservative approach and the two friends entered into an amicable property agreement, recorded what each had and confirmed it was separate property.  They had no intention of jointly acquiring any property. Making the agreement gave them peace of mind and although both of them are now deceased, they did enjoy a few happy companionable years living together under the same roof.  It was a shame they could not have done this at the outset, without needing to consult lawyers.

By Terry Carson,

© Terry Carson – February 2010

Disclaimer: The information contained in this article is of a general and summarised nature only. It should not be used as a substitute for obtaining personal legal advice.