What is a de facto relationship?

In New Zealand, a de facto relationship is defined as a relationship between two people who are over 18, living together, and are not already married or in a civil union with one another. Knowing whether you’re in a de facto relationship or not is important under the Property (Relationships) Act 1976, as both partners are entitled to half of the Family Home and other relationship property if they have been in a de facto relationship for over three years.

For some people, it will be obvious that they are in a de facto relationship. For others, however, there can be confusion as to whether they are in a de facto relationship (or about to become one), particularly on the “living together” point. If “living together” needs to be determined by the Court, the following factors can be considered:

  • the duration of the relationship:
  • the nature and extent of common residence:
  • whether or not a sexual relationship exists:
  • the degree of financial dependence or interdependence, and any arrangements for financial support, between the parties:
  • the ownership, use, and acquisition of property:
  • the degree of mutual commitment to a shared life:
  • the care and support of children:
  • the performance of household duties:
  • the reputation and public aspects of the relationship.

A de facto relationship only has to be officially defined if it gets to Court, and the Court is entitled to use all or just some of the factors listed above, whichever are deemed appropriate in the Court’s view. The Court has found de facto relationships in all sorts of cases, such as between people who do not usually live under the same roof, or even between people who were divorced overseas but still live under the same roof. It is a complicated exercise!

de facto relationship nz

Are we in a de facto relationship?

If you are deciding whether your relationship is de facto, read the factors listed above. If you meet even just several of those factors you may be best to treat the relationship as de facto, for example if you are considering whether or not you need a prenup. If you are quite sure that your relationship is not yet de facto, you may be best to consult a lawyer to get reassurance on this. If you would like some specific information initially, feel free to contact the Agreeable team and we will get you on the right track.

Why are de facto relationships important?

Once a couple has been in a de facto relationship for three or more years, each partner would become immediately entitled to an equal share of the relationship property upon separation or death. This means that, if either person does have assets that they would like to remain theirs if the relationship ends, such as their house, their Kiwisaver, or their business, then that person would need to get a Relationship Property Agreement (also known as an “RPA”, “prenup” or “contracting out agreement”).

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An RPA allows each of you to set out which assets would be yours in the event of separation or death, removing the possibility of a trip to Family Court for one partner to claim their share. If you speak to anyone that has gone to court for a relationship property case, they will tell you that an RPA, while not the most romantic thing to discuss, could save you significant amounts of time, money, and stress down the track.

What if we’ve kept our finances completely separate?

Your relationship can potentially be defined as de facto even if you’ve kept your finances completely separate. In the case of Watene v Lord [2017], the Court found that keeping bank accounts and finances separate was not necessarily an indicator of the nature of the relationship. Some of the other factors mentioned above may outweigh the fact that the finances were separate, and this can lead to a finding of a de facto relationship.

Get our free guide to Relationship Property Agreements

What if we’ve been on-again and off-again?

The dates when de facto relationships start, pause, restart, and stop can be fluid and difficult to pinpoint. The general rules/law that the Court applies are not black and white. While a couple that has had breaks must generally be in a continuous relationship for three years to be seen as de facto, some stop-start relationships have still been found as continuous, even if one partner doesn’t believe that to be the case. Clearly agreeing on the date that you started being a de facto relationship can save you time & money in the long run.

What else should we know?

  • Relationships under three years: if there is a dependent child in the relationship, regardless of whether both partners are biological parents, the Court may find that a relationship of under three years still requires an order of asset division between the parties. Furthermore, if one party made a substantial contribution to a relationship of under three years, the Court may find that failure to make an order of asset division would be seriously unjust. The share of assets would be based on each partner’s contributions to the relationship.
  • If we know we’re not de facto (yet): the Supreme Court in Sutton v Bell has recently found that one partner putting a property in a trust before becoming de facto can still lead to that property being claimed by the other partner upon separation. The fact that there was a clear and present intention to progress to a de facto relationship was relevant to the Court in allowing a claim. At the very least, the parties should have contracted out with a relationship property agreement, even before becoming de facto, to avoid going to court.

Check out our other articles:

What is a Contracting Out Agreement? 10 Things to Know

A Guide to the Property (Relationships) Act 1976