What If My Partner Won't Agree to a Spousal Buyout?

What If My Partner Won't Agree to the Buyout?

When a relationship ends, navigating the separation of jointly-owned property can be one of the most challenging and emotional hurdles. If you're a first home buyer in Logan, a property investor in Beenleigh, or a self-employed business owner on the Gold Coast, and you're trying to buy out your partner's share of the property, but they won't agree, it can feel like you've hit a dead end.

Here’s a clear breakdown of your options in Australia, focusing on property in Queensland, and how a finance broker can help you understand the mortgage implications.

1. The Importance of Negotiation and Mediation First

Before taking legal action, it is essential to exhaust all options for a mutual agreement. This not only saves significant time and money but also preserves relationships, which is particularly important if you have children together.

• Financial Disclosure: A key step is for both parties to provide full and frank financial disclosure. This means sharing details about income, assets, and liabilities. This transparency allows for a clear understanding of the 'asset pool'—the total value of all assets to be divided—and can help form the basis of a fair negotiation.
• Mediation: If direct negotiations stall, engaging a professional family dispute resolution service or a private mediator is the next step. A neutral third party can help facilitate communication and explore a range of solutions, including a buyout, a sale to a third party, or even delaying the sale until a future date (e.g., when a child finishes school).

In most cases, the Federal Circuit and Family Court of Australia requires parties to attempt mediation before they can apply to the court for property orders.

2. Legal Options When a Partner Refuses to Agree

If mediation fails, Australian law provides clear pathways to resolve property disputes. Your legal options depend on whether your property dispute is part of a family law matter (e.g., divorce or separation from a de facto relationship) or a co-ownership dispute between friends, family, or business partners.

For Separating Couples (De Facto or Married)

If you are a separating couple, your matter falls under the Family Law Act 1975 (Cth).

• Court Application for Property Orders: As a last resort, you can apply to the Federal Circuit and Family Court of Australia for a property settlement. The court has the power to make orders to ensure assets are divided in a “just and equitable” manner. This can include an order to force the sale of the property.
• Forcing the Sale: The court can appoint a trustee to manage the sale of the property, even if one party refuses to cooperate. The trustee has the legal authority to sign all necessary documents, effectively removing the uncooperative partner's ability to delay the process.

It is critical to be aware of the time limits: for married couples, you must apply to the court within 12 months of your divorce order becoming final. For de facto relationships, the time limit is two years from the date of separation.

For Co-Owners (Not in a Relationship)

If the co-owned property is a joint investment with a friend, sibling, or business partner, and the relationship is not a de facto one, the dispute is governed by state law. In Queensland, this is the Property Law Act 1974 (Qld).

• Application to the Court: Under Section 38 of this Act, a co-owner can apply to the Supreme Court of Queensland for an order to appoint a statutory trustee for sale.
• Statutory Trustee: The court-appointed trustee will manage the sale of the property on behalf of the co-owners, with the proceeds distributed according to the court's order. This is considered a highly effective and decisive remedy when one party is refusing to sell.

3. The Finance and Mortgage Implications of a Buyout

Even if your partner agrees to be bought out, the most significant hurdle is often securing the finance to do it. This is where an experienced mortgage broker, like the team at Ferns Finance Brokers, becomes your most valuable ally.

• New Home Loan Application: When you buy out your partner, you are essentially applying for a new home loan in your sole name to pay out the existing joint loan and provide a cash payment to your ex-partner for their share of the equity.
• Income and Servicing: The bank will assess your application based on your individual income and financial situation, not the combined income you had as a couple. This can be a major challenge for many, as your borrowing capacity may have decreased.
• Valuations and Equity: Lenders will require an independent valuation of the property to determine its current market value. The buyout figure you pay your partner will be based on this valuation, minus the outstanding mortgage debt. Your mortgage broker can help you navigate this process and ensure the valuation is competitive.

How Ferns Finance Brokers Can Help

The process of buying out a partner can be a complex and daunting task. As local mortgage brokers serving the Logan, Beenleigh, and Gold Coast areas, Ferns Finance Brokers understands the unique challenges of our community. We can help you:

• Assess Your Borrowing Capacity: We will work with you to determine if you can afford to take on the entire mortgage on your own.
• Source the Right Lender: We have access to a wide panel of lenders and can find a home loan product that is flexible and suitable for your new financial circumstances.
• Coordinate with Your Legal Team: We can work in tandem with your family lawyer or property solicitor to ensure the finance process aligns with your legal settlement.

While the legal path to forcing a buyout or sale exists, a skilled finance broker can often help you explore the financial feasibility of a buyout first, which may be the key to a smoother, less confrontational outcome for everyone involved.

If you're facing this difficult situation in Logan, Beenleigh, or the Gold Coast, we're here to help. Contact the friendly and knowledgeable team at Ferns Finance Brokers today for an obligation-free consultation to discuss your options.