9 things you need to know about selling property in divorce


Strained financial circumstances are frequently a primary catalyst for couples breaking up. And, if not at the root cause initially, financial difficulty and disagreement about how finances are managed often eventuate post-separation.

For most couples who call time on their relationship, real property; the marital home, investment property or holiday home, make up a significant portion of their net asset pool.

It often becomes necessary, or at least prudent, to ease financial burden by selling a property prior to reaching final settlement orders.

Without court orders in place or a formal agreement between the parties, the sale of property can be a gruelling and potentially problematic process.


9 points to bear in mind when considering the sale of property prior to reaching final settlement:

  1. Whether the property is in joint names or that of only one spouse, both the property and any proceeds from a sale will generally be deemed part of the net asset pool available for assigning in full, or in part, to each party in the final property orders.

  2. Real estate agents must abide by a Code of Conduct. If there are no orders from the court that order the 'non-agreed' sale, then before a property can be listed, the agent must first source a copy of the Certificate of Title for the property and secure a signed agreement from each party named on the title before listing. 

  3. Where there are no orders made but there is a mutual agreement between the spouses to sell a jointly owned property, the real estate agent will require written instructions, signed by both spouses, in relation to the listing price, responses to any offers received and acceptance of a sale price or sale by auction.

  1. In the event of achieving the sale of a jointly owned property, there must be an agreement between the spouses as to how the net sale proceeds will be allocated. Usually, this is first to the agent and selling costs and to discharge any mortgage against the property and then the remaining proceeds need to be split. Will the funds will be divided between the spouses in agreed ratio or deposited into a joint bank account or solicitor’s bank account pending agreement of the eventual division of the property?  If the owners on the title deed have not issued an agreed instruction, the conveyancer managing settlement of the property must hold the net proceeds in their trust account until they receive joint written instructions or a Court Order to release the funds.

  2. When a property owned solely by one of the spouses is sold, it is important that the other spouse is kept up-to-date on the progress of the sale and the intended application of the net sale proceeds. As per point one, despite the title being registered in one spouse’s name, the property is likely to form part of the splittable net asset pool. Accordingly, if there is any threat that the funds may evaporate from the net asset pool, this can be countered with an application for urgent court proceedings to prevent the sale or to secure the net proceeds until the application of those funds is agreed or ruled on by the court.

  3. There is a risk that a spouse who owns a property solely in their own name may borrow against the asset, further encumbering that property without informing the other party or requiring their consent. This could have a negative impact on the overall property split. If you have concerns about this issue, you should seek legal advice as to how you might prevent it.

  1. If a property is sold and net proceeds are allocated to the individual parties prior to final agreement being reached, it is likely that the amount each spouse received will form part of their share of the final division of assets. Each party may be required to divulge their use of the funds and provide evidence of this during negotiations with their former spouse. Be sure to keep good records of how the funds were applied.

  1. If communication or negations break down to the extent that former spouses cannot reach agreement on any aspect of the sale of a property, one spouse can apply to Court to appoint a third party to become responsible for the sale of the property on behalf of both parties.

  1. There is no family law principle stipulating the required use of the net proceeds of a property sale. As such, the former partners are at liberty by agreement to determine how it will be applied. Common uses include dividing it between themselves, using it to pay or reduce other outstanding debts, meet children’s education expenses or even to contribute towards child support or spousal maintenance payments in the interim period until a final property settlement is agreed or orders are made by the court.


Recently I teamed up with experienced Perth real estate agent, Peter Taliangis, to publish a great guide offering practical advice on property sales and getting through the often sensitive exercise of settlement mediation, managing your emotions and progressing stalled or complex negotiations.


How to get divorced in Australia

Email admin@divorceresource.com.au  to request your free copy of Separation and Divorce Involving Real Estate: 100 expert tips


Got a property to sell?

Need an appraisal or advice about the property market?

Contact Peter Taliangis

Real Estate in divorce

Phone: 0431 417 345

Email: peter@professionalsfremantle.com.au


Separated and don't even know where to start?

Need assistance with the separation and settlement process?

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Tired of paying legal fees?

Trying to find a way to just get out of the whole sorry mess? 

If you answered YES to any of these questions, my results-driven and cost-effective separation and settlement consulting could be the answer you've been searching for.

Email christine@divorceresource.com.au to find out more. 

Divorce Cost Australia

Published by, Christine Weston
Founding Director and Creator of Divorce Resource

The information in this article is general in nature and should not be considered as professional advice. You should seek the advice of a registered professional who can appropriately assess your specific circumstances before offering their expert opinion.


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