Following separation it may not be possible for a couple to continue living together in the family home until it is sold (or one party buys the other out). 

Generally, the party who remains in the family home will meet the household outgoings, including mortgage payments.  The party who moved out makes rental payments on their own new accommodation. 

If the party renting has much larger accommodation costs, they are entitled to make a claim for occupational rent from their spouse/partner.

Typically, occupational rent is calculated either by:

  1. Ascertaining what the market rent is for the family home, and calculating a half share of that market rent from separation until settlement; or
  2. Applying an interest rate to the non-occupying party’s share of capital in the family home.

The Court has held that parties may claim one or other of the above, but not both. 

If the occupying party cannot afford to pay the half-share of the market rent it is often the case that the money owed will be adjusted on final settlement.

Similarly, if the method is used of applying an interest rate to the share of capital the party who has moved out has in the property the amount owing is often adjusted on final settlement.

The occupying party may seek to set-off the outgoings they have paid, or any spousal maintenance claim they have, against an occupational rent claim. 

If there are children in the care of the occupying party, that person may also raise a child support claim to offset the occupational rent claim further.

What is very important is for an intention of claim to be communicated early to the occupying party. 

The Court may disallow an occupation rent claim if notice of a claim is not given early enough, so it is important to put the occupying party on notice promptly as occupational rent can be calculated from when notice is given.

The family home also needs to be in a rentable state for occupational rent to be claimed.  If the family home is below healthy homes standards, or lacking code compliance, the Court may consider that no occupational rent may be claimed.

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Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.