A member asked over 8 years ago

Legal rights to rental income on jointly owned marital property

My ex-wife (recently divorced) lives in the house which is mortgaged in both our names.  She decided to rent the downstairs area of the house for $200 p.wk after I moved out.  I rent a unit for $330 p.wk. The mortgage repayments are around $208 p.wk so she's been using the rental income to pay for the mortgage. However, as she is still living in the house (rent free), should I be entitled to half of the rental income from the tenant?

Law Advisor Research Team
Researchers at LawAdvisor

Hi there. It sounds as though you are having a difficult time. If you and your ex wife are still listed on the Certificate of Title for the property as co-owners, then you both legally own the house. This means that any profit that your ex wife makes from the property, through rent or other means, must be accounted for in proportion to her share of ownership. For example, if she owns 50% of the property, then she is required to give you half of the rental income she receives. This rule stems from the Property Law Act 1974 (Qld).

While this may be the the ‘legal’ answer, you still have a practical problem of enforcing your rights. For this reason, you should consider preparing a binding financial agreement that deals with the ownership of the house and entitlement to its rental income. These agreements are regulated under the Family Law Act 1975 (Cth).

Parties to a divorce may apply to the Court in a property settlement proceeding for an order about how property will be divided. In this case the Court will make an order which it considers to be fair based on the circumstances of each case. There is no single approach to the division of assets made by the Court, and generally speaking, assets are not simply split “50/50”. Instead, the Court considers the contribution made by each party to the joint assets. This will include such things as actual contribution of capital (for example if one party works full time) but also non cash contributions, like the costs of raising a child.

Alternatively, the Family Law Act provides for the possibility of parties to a divorce making their own binding financial agreement. This can deal with the splitting of assets, and other financial issues like rental income from a jointly owned property. These agreements are then made binding through either a consent order by the Court or by the signing of a Binding Financial Agreement. For the creation of a Binding Financial Agreement both parties must receive independent legal advice to ensure each person is being treated fairly and/or knows their rights.

Suggested way forward

The dividing of property after a divorce is extremely complicated. In the situation you described, it sounds like your ex wife owes you a share of the money she is making from the rental income because you are still a co-owner of the property. Practically, you will need to reach some sort of arrangement with her concerning the future of the house and any rental income at the property. Regardless of whether you can reach this arrangement by consent or not, it is very important that you seek legal advice. By pressing the “Consult a Lawyer" button LawAdvisor can help you search for experienced lawyers and obtain fee proposals for their services. Costs for legal advice and representation will vary between providers based on experience and the scope of services.

Answered over 8 years ago   Legal disclaimer

Val Antoff
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