A vital provision of the Property (Relationships) Act 1976 (“the Act”) requires the completion of full disclosure by both parties before the Contracting Out Agreement (“COA”) or Separation Agreement (“SA”) can be signed and certified.
Disclosure is the process during preparation of a COA or SA, whereby both parties are required to obtain or provide evidence of all their assets and liabilities. This may be in the form of property valuations, bank statements, company annual accounts, car valuations, investments portfolios, mortgage statements etc. Before either party can sign the agreement, disclosure is used so that the solicitors, and in some cases, the accountants, can assess the value of each party’s assets and liabilities, whether joint or separate. Once they have received this information, on the basis that they have received full and complete disclosure, the solicitors should be able to adequately advise their client of their legal position and entitlements under the Act, if they proceeded to sign the agreement and can sign-off the agreement confirming this advice has been given.
Without disclosure, both the parties and their solicitors are unable to accurately assess what their entitlements under the Act may be, and in turn, the parties may receive less than what they are entitled to. This is important, as not only can a client miss out on improving their financial position, but also, where a party has not received sufficient advice and/or information in the disclosure, or there has been deliberate withholding of information or misinformation from the other party, the agreement can be set aside by the court for “serious injustice”. It is the role of the solicitors to protect their clients in this situation, by ensuring the other party and their solicitor have provided full and complete disclosure to the best of their knowledge. Disclosure is not only used for transparency for the parties, but also as a ‘check and balance’ on the actions of the solicitors who must sign off the agreements.
Full and frank disclosure is offered to both parties to allow for full and final settlement of the agreement and transparency of assets. When signing these agreements, except where deception has unknowingly occurred by one party, the parties can gain a relative amount of peace from the fact that they have entered into this agreement with their ‘eyes wide open’ as to what they are negotiating, even if they have elected to negotiate an agreement which departs from the principles of equal division under the Act.
Given the potential intricacies of these agreements and finality once signed, it is strongly suggested that you contact a solicitor to discuss these matters further. In any event, to sign either agreement, you will require independent legal advice.