The Critical Importance of Court Orders and Binding Agreements in Property Settlements
When a relationship ends, it’s natural to want to move on as quickly and smoothly as possible. For many separating couples, that means making a verbal agreement or a quick, informal arrangement about how to divide property. It might feel like the easiest way to avoid stress or legal costs—but without court orders or a properly binding property settlement, you could be leaving the door open to serious complications down the track.
So let’s talk about what can go wrong when you rely on an informal deal, and why formalising your property settlement is absolutely essential.
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Key Takeaways:
- Informal agreements are not enforceable.
- Future claims can be made if property settlements aren’t formalised.
- You remain liable for joint debts without formal documentation.
- Superannuation and tax exemptions require court orders or BFAs.
- Legal advice ensures you protect what matters most.
Why Informal Agreements Are a Risky Shortcut
They Can’t Be Enforced
An informal agreement might feel solid at the time—you trust each other, you’ve both agreed, and things seem fair. But people and circumstances change. Perhaps one person loses their job, meets someone new, or decides they want more from the arrangement. Without court orders, there’s no legal way to enforce the property settlement.
Real-life scenario: Sarah and Tom agreed that Tom would buy Sarah out of their shared home within six months of separation. At first, Tom was cooperative. But as property values rose, he delayed the payment, then ultimately refused to proceed. Because they had no court orders or binding agreement, Sarah had no legal leverage to enforce what they had agreed.
The Future Is Still Up for Grabs
Separating does not automatically sever your financial ties. Unless your property settlement is legally finalised, your former partner can make a fresh claim against you years later—even after you’ve built a new life or bought a new home. This often happens when one party sees the other doing financially well and reconsiders the past arrangement.
Real-life scenario: Jake and Emma separated five years ago. They had an informal agreement and never revisited it. Jake recently bought a new property with his partner. When Emma found out, she felt she hadn’t received a fair share previously and made a legal claim on Jake’s new property. The court accepted it, as there was no formalised property settlement.
Time Limits Are Ticking
Time limits exist for a reason. They provide structure to the process, but missing them adds complexity. Married couples have 12 months from the date of divorce; de facto couples have two years from separation. Life gets busy, and it’s easy to think “we’ll sort that later,” but later can become too late.
Real-life scenario: Alex and Lily divorced but delayed finalising property matters. At month 15, Alex wanted to claim their share of assets. But the time limit had expired. They had to apply for court permission, which was stressful, costly, and not guaranteed.
Superannuation? Not Without Formal Orders or a Binding Agreement
Superannuation is one of the most overlooked areas in informal agreements. Many couples agree verbally to divide super, unaware that without formal orders or a Binding Financial Agreement, it’s legally inaccessible. Super funds will simply not act on informal decisions.
Real-life scenario: Martin promised Zoe that she would receive 40% of his superannuation as part of their verbal settlement. When Zoe tried to access her entitlement, the fund rejected her request. They needed a court order, which they never had. She missed out entirely.
Debts Stick Around
Informal agreements often forget joint liabilities. Just because you agree to transfer a loan or mortgage responsibility doesn’t mean the lender agrees. Without court orders or refinancing, both names remain on debts—and either party can be pursued if things go wrong.
Real-life scenario: Mia moved out and agreed James would keep the house and pay the mortgage. Two years later, James fell behind on repayments. The bank pursued Mia for the outstanding debt because her name was still on the loan.
Tax and Stamp Duty Can Bite
Tax rules provide exemptions for property transfers between separating couples, but only if supported by formal court orders or binding agreements. Without them, thousands of dollars can be lost to stamp duty and capital gains tax—an unnecessary hit at an already difficult time.
Real-life scenario: Nadia transferred her share of the home to her former husband Chris. They never formalised it. When the transfer was processed, they were charged over $7,000 in stamp duty that could have been avoided.
Why Enforcement Matters
Even the most amicable separations can go off-track. Agreements made with the best of intentions can fall apart when emotions flare, financial pressure builds, or new relationships form. Without enforceable court orders or a binding agreement, there is no straightforward way to hold someone accountable.
Real-life scenario: Leo and Jade agreed to sell their investment property and split the proceeds. After the market rose, Jade refused to sell, hoping to gain a bigger share later. Leo had no way to enforce their original deal without formal orders.
Your Pathways to Legal Protection
Consent Orders
Binding Financial Agreements (BFAs)
Court-Determined Orders
Frequently Asked Questions (FAQs) about Property Settlement and Court Orders
What happens if my former partner doesn’t follow our agreement?
If your agreement isn’t legally binding—either through Consent Orders or a Binding Financial Agreement—it cannot be enforced, leaving you vulnerable to uncertainty and potential disputes. At Village Family Lawyers, we help you formalise agreements to safeguard your future and provide legal confidence. Without enforceable documents, you may need to restart the process, often in less favourable circumstances. That’s why we focus on resolution-focused, legally sound solutions from the outset.
Can I split superannuation without a court order?
No. Superannuation division requires either court orders or a Binding Financial Agreement. Super funds are legally prohibited from acting on informal or verbal agreements. Our experienced team ensures your property settlement, including superannuation, is handled correctly and strategically—providing you with a secure and enforceable financial outcome.
I separated years ago. Can my former partner still make a claim?
Yes—if no formal legal agreement was reached. Although time limits do apply, courts may grant extensions in certain cases. This means your financial future can remain at risk long after separation. We guide clients through formalising property settlements and financial agreements to prevent such uncertainty and protect long-term security.
What if we agree on everything? Do we still need court orders or a binding agreement?
Absolutely. Even the most amicable agreements can unravel over time. Without legal formalisation, you risk disputes, tax consequences, or financial exposure. Our firm is committed to turning mutual agreements into enforceable documents—such as Consent Orders or Binding Financial Agreements—so you can move forward with clarity and stability.
What if I miss the time limit for applying?
You may still be able to proceed by applying for special permission from the court, but this requires proving exceptional circumstances—and success is not guaranteed. At Village Family Lawyers, we act promptly to help you avoid this risk, providing strategic guidance from the outset to ensure your legal options remain open and strong.
How do court orders help with tax and stamp duty?
Property transfers under valid court orders or a Binding Financial Agreement are eligible for significant tax and stamp duty exemptions. Without these, you could incur avoidable costs amounting to thousands. Our legal team ensures every financial agreement is structured to maximise these legal benefits and protect your financial position.
How we can help
At Village Family Lawyers, we help you protect your future with a formal, enforceable property settlement. Whether you choose Consent Orders, a Binding Financial Agreement, or need court support, we ensure it’s done right.
If you’re unsure where to start or feeling overwhelmed, book a fixed-fee initial consultation. There’s no obligation to continue, and it’s a chance to get really clear on your legal position and your best next step.
You can also book a free 15-minute discovery call to see how we can help. Call us on 1300 413 997 or visit our website today. Let’s take the uncertainty out of your separation and secure your financial future.