The issue of occupational rent often arises when one spouse or partner remains living in the family home after separation. Whilst this generally only happens for a short period of time while the relationship property division is worked through, people sometimes live with this arrangement for years. See Separation Issues and Separation and Property Division for further information.

Occupational rent is a notional rent paid by the spouse or partner still living in the home, to compensate the other for the fact their share of capital in the home has been made available to the other spouse/partner.

The ability to seek an adjustment for occupational rent comes under section 18B of the Property (Relationships) Act, where the Court has the discretion to compensate someone for contributions they have made after separation. One person making their interest in the family home available to the other is considered a “contribution” under this section. 

However, occupational rent is not something that can simply be claimed as “due and owing”. The power to award occupational rent is discretionary, exercised if the Court thinks it is just in the overall circumstances to do so. 

It could be discounted depending on the contributions made by the occupier to the property, including the payment of any mortgage obligations or other outgoings. In one case, it was found not to be payable at all because the home had serious weather-tightness issues and there was a question as to whether it was able to be rented in that condition. 

Often an adjustment for occupational rent can be negotiated into a Separation and Relationship Property Agreement, with the parties agreeing on a “fair” amount of compensation.

If you have any questions about this or any other relationship property issues, please do not hesitate to contact our Wellington based family lawyers Debbie Dunbar, email debbie.dunbar@morrisonkent.com, phone (04) 495 9940 or Maretta Twentyman, email maretta.twentyman@morrisonkent.com, phone (04) 495 8918.

Further information can be found here: