Occupation rent after separation

Occupation rent is a legal mechanism that can come into play when a couple separates, and one person continues living in the family home while the other moves out. In such cases, the court may require the occupying party to compensate the non-occupying party for their exclusive use of the property. This compensation, known as occupation rent, is typically sought when the non-occupying party expresses their intention to claim it. It is designed to ensure fairness, especially if the remaining party benefits from sole access to the home.

When may the Court Order Occupation Rent?

 The Court may order that the occupying party pay the non-occupying party occupation rent if one or more of the following circumstances apply:

• The family home is in rentable condition.
• The non-occupying party is incurring rental costs.
• There are little outgoings on the property (for example, mortgage, rates and insurance) or the non-occupying party is covering half or all of the property outgoings.
• The occupying party is delaying the division of relationship property, for example, the occupying party refuses to accept reasonable offers from potential buyers of the family home but cannot afford to purchase the family home themselves.

It is important to note that an order for occupation rent is a discretionary remedy, meaning the Court will not always make an order, even if one or more of the above circumstances apply.  The Court must be satisfied that making such an order is just.

How is Occupation Rent Calculated?

The Court has also taken a "broad-brush" approach to the amount of occupation rent ordered, meaning the Court has not engaged in a mathematical calculation but rather ordered an amount it considers just in all of the circumstances.

However, most commonly occupation rent is calculated as half of the market rent for the family home.  For example, if the market rent for the family home was $800.00 per week from the date of separation, the non-occupying person would be entitled to $400.00 per week in occupation rent from the occupying person.  If 38 weeks had passed since separation, then the non-occupying person would be entitled to $15,200.00 total in occupation rent from the occupying person.  This is usually satisfied by making an appropriate adjustment in the division of relationship property. 

When going through a separation it is important to be aware of your entitlements and obligations, including those relating to occupation rent.

If you have any enquiries relating to this topic or article, or require assistance with occupation rent claims or other separation matters, please contact:

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Peter Fuscic

Email: pfuscic@mcveaghfleming.co.nz

DDI: 09 306 6746

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Amber Holdaway

Email: aholdaway@mcveaghfleming.co.nz

DDI: 09 306 6725

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