What is the Impact of COVID-19 on Your Property Settlement?
We have seen COVID-19 impact many things - from family life and wellbeing, to employment and industries. Favourably, or more commonly, adversely, the changes have been felt across just about every facet of life, in every corner of the globe.
Family Law has not been immune to COVID-19’s effects; delays in proceedings, changes in legislation and even the merging of the Family Court with the Federal Circuit Court are just some of the challenges currently being navigated by legal professionals and families alike.
If you’ve negotiated or are currently negotiating a property settlement during the COVID-19 pandemic, you’ve likely experienced significant impacts, or you may have just started to see some challenges arise.
We share what the impacts of COVID-19 on your property settlement are likely to be, and how to best navigate these.
Property Values Have Changed
The property market was initially predicted to drop, however lower rates set by the Reserve Bank has seen record low interest rates passed on by the banks, resulting in a record-high price surge in nearly all major Australian city housing markets.
While economists are warning buyers that interest rates are likely to rise, the Reserve Bank is holding steady, and COVID-19 continues to wreak havoc across the globe. As such, all markets remain volatile, and there is no way of truly knowing what the markets will do over the next 12 to 24 months and beyond that, with many predicting it will continue to boom.
What we do know, however, is that property values have changed significantly, and will continue to remain volatile. When it comes to the effects of COVID-19 and negotiating your property settlement, this will likely mean that any valuations prepared before COVID-19 are redundant. These may need to be reworked to reflect current values.
In addition, valuations prepared during or after COVID-19 may be disputed by one party, or the valuations may be at odds between parties and their prospective valuers. If property involves businesses, it may be difficult to determining things like future cash flow and profit in uncertain times.
Superannuation Values May Have Changed
Superannuation is another type of asset which is likely to have been affected by COVID-19. Those who have their super invested in shares - particularly those that are high risk - or who lost their job during the pandemic may see their Superannuation amount is not as high as predicted to be pre-COVID. While this may not be too much of a concern to those with many years left before retiring age, it is an important consideration those who are, and for those who are separating as superannuation is typically treated as property and will be taken into account during the division of assets and property.
Bankruptcy and Job Loss / Changes
Many individuals and companies have faced job loss, job change, and increased risk of insolvency.
A loss of income will impact property settlements since part of the process involves considering the future needs of each party and their earning capacity. Any party facing insolvency or the risk of insolvency while negotiating a property settlement should obtain legal advice immediately.
COVID-19 May Cause Delays With Your Property Settlement
While most courts are back up and operating optimally, there may be delays due to backlogs of work from periods when courts were operating at reduced capacity.
Some parties may wish to consider Mediation or Arbitration in order to work through issues and resolve property settlements in a more efficient and cost-effective manner.
Need Help Navigating the Impact of COVID-19 on your Property Settlement?
At Pullos, we can assist with getting you financial advice and independent valuations on your assets, and advice on market trends. We can then work with you to devise the best strategy for your needs to ensure the best possible outcome. We have over 30 years’ experience dealing with property settlements, as well as all issues of divorce and spousal maintenance. In addition, we have worked with many families separating during the COVID-19 pandemic, and can help with both in-court and out of court solutions while providing the support you need in these uncharted times.
Please contact us to make an appointment for an initial telephone call. Alternately call us to speak to one of our Brisbane specialist family lawyers (07) 3144 1641 or one of our Gold Coast specialist family lawyers (07) 5526 3646.