Time limits for family law property settlements

When a relationship ends, separating couples often need to decide how to divide their property, debts and superannuation. This is called a property settlement.

A property settlement can deal with things like the family home, bank accounts, cars, businesses, investments, loans, credit cards, tax debts and superannuation. It is important to know that strict time limits apply if you want the Court to make property settlement orders.

What are the time limits?

The time limit depends on whether you were married or in a de facto relationship.

For married couples, an application for property settlement must usually be filed within 12 months after the divorce becomes final.

This means the time limit does not run from separation. It runs from the date the divorce order takes effect.

For de facto couples, an application must usually be filed within 2 years after separation.

The date of separation can sometimes be disputed, especially if the couple continued living under the same roof after the relationship ended.

What if the time limit has already passed?

The short answer; get legal advice immediately.

If the time limit has expired, a person cannot simply start property settlement proceedings as of right. They must ask the Court for permission to proceed. This is called applying for leave out of time.

“Leave” means permission from the Court.

The Court can allow a late application, but it is not automatic. The person applying must usually show that hardship would be caused if permission were refused.

Hardship means more than inconvenience or regret. It generally means a real financial disadvantage or substantial unfairness.

What will the Court consider?

The Court looks at each case individually. The main factors usually include:

1. The reason for the delay
   The Court will consider why the application was not made in time. Reasons might include illness, family violence, financial hardship, caring responsibilities, negotiations between the parties, or a genuine misunderstanding about the deadline.
2. The length of the delay
   A short delay is usually easier to explain than a delay of many years. However, there is no automatic cut-off. The Court will still look at the overall fairness of allowing the case to proceed.
3. Whether there is a real claim
   The Court does not conduct a full property settlement hearing at this stage. However, it will consider whether the proposed claim has enough merit to justify allowing it to proceed.
4. Hardship
   The Court will consider whether refusing leave would cause hardship to the applicant or, in some cases, to a child.
5. Prejudice to the other party
   The Court will consider whether the delay has unfairly affected the other person. For example, old records may no longer be available, assets may have been sold, or the other party may have arranged their finances on the basis that the matter was finished.

The older case of Whitford & Whitford (1979) FLC 90-612 remains an important authority. It confirms that a person seeking leave out of time must show more than just a missed deadline. There must be a proper basis for the Court to allow the application to proceed.

The High Court’s decision in Stanford v Stanford [2012] HCA 52 is also important. It confirmed that before making property orders, the Court must be satisfied that it is just and equitable to do so. In plain English, the Court must be satisfied that it is fair and appropriate to alter the parties’ property interests. This has since been codified in the legislation as part of the 2025 reforms to the Family Law Act 1975 (Cth).

Why formalise a property settlement?

Many separating couples reach an agreement between themselves. That is often a positive step. However, an informal agreement is not legally binding or enforceable.

For example, problems can arise if:

• one person later changes their mind;
• a payment is not made;
• a property transfer is delayed;
• a mortgage remains in joint names;
• superannuation is not properly split;
• tax or stamp duty issues are overlooked; or
• one person later says the agreement was unfair.

The two most common ways to formalise a property settlement are:

1. Consent Orders; or
2. A Binding Financial Agreement.

Consent Orders

Consent Orders are written orders approved by the Federal Circuit and Family Court of Australia. Usually, no Court attendance is required if the paperwork is properly prepared.

Consent Orders can deal with sale or transfer of property, payment of money, debts, superannuation splitting and other financial arrangements. The Court must be satisfied that the proposed settlement is just and equitable.

Binding Financial Agreements

A Binding Financial Agreement, often called a BFA, is a private agreement made under the Family Law Act 1975. Each party must receive independent legal advice before signing.

BFAs can be useful in some situations, but they must be prepared carefully. In Thorne v Kennedy [2017] HCA 49, the High Court confirmed that a financial agreement may be set aside where there has been undue influence, unconscionable conduct, pressure or serious unfairness in the circumstances in which it was signed.

Advantages of formalising an agreement

Formalising a property settlement can provide:

• certainty about who keeps what;
• enforceability if one party does not comply;
• finality so both parties can move forward;
• a proper mechanism for superannuation splitting;
• clearer responsibility for debts;
• reduced risk of future claims; and
• better protection when transferring real estate.

Possible disadvantages

There can be some downsides. Formalising an agreement may involve time, cost and financial disclosure. Once finalised, it can also be difficult to change.

However, in many cases, the benefits of properly documenting an agreement outweigh the disadvantages. A clear, formal settlement can prevent uncertainty, conflict and expense later.

If your property settlement time limit is approaching, or has already passed, it is important to act promptly. Our family lawyers can advise you on your options, including whether an application for leave out of time may be available, and can help you take the next steps to protect your position.