Buying a Home From a Divorcing Couple in Victoria

Buying a home from a divorcing couple in Victoria is usually safe if the contract is properly signed and the title is clear. Every registered owner, or someone with valid authority for them, must sign the contract and transfer. A non title spouse may lodge a caveat under section 89 of the Transfer of Land Act 1958 (Vic), a family law injunction under section 114 of the Family Law Act 1975 (Cth) may stop the sale, and section 106B can affect transfers made to defeat a spouse’s claim. Your conveyancer’s job is to find those risks before you sign or settle.

Is buying from a divorcing couple in Victoria risky?

The risk is not the separation itself. The risk is whether both sellers have legal power and willingness to complete the sale.

Many separation sales in Melbourne settle without drama. A couple may agree to sell, discharge the mortgage, split the proceeds and move on. The trouble starts when one person changes their mind, refuses to sign, claims an interest that is not obvious from the title, or asks the family courts to stop the property being dealt with.

As a buyer, you’re not part of their family law dispute. Yet the home you’re buying may be the main asset in that dispute. That means you need sharper checks than you might need for a straightforward sale by one owner who has already moved into their next place.

Do both owners have to sign the contract of sale?

Yes. If two people are registered on the title, both owners must sign the contract of sale and the transfer of land, unless a properly authorised person signs for one of them.

This applies whether they own as joint tenants or tenants in common. One co owner cannot sell the whole property alone. You might be dealing only with the spouse still living in the home, perhaps the one who met you at the Saturday inspection in Preston or answered questions through the agent. That does not make them the only seller.

The title is the starting point. A fresh search tells you who owns the property, how they hold it, and whether anything has been lodged that could affect settlement. If you’re unsure what that search shows, it helps to understand how to do a title search in Victoria before you rely on the contract pack.

If only one registered owner signs and the other has not given authority, the contract may not bind the missing owner. You might have a claim against the person who did sign, but that does not give you the clean title you expected. For a deeper look at this point, see our guide on do all owners have to agree to sell a house.

What if one spouse is not on the title?

A spouse who is not on the title may still claim a beneficial or equitable interest in the home. That claim can arise where they paid part of the deposit, helped with the mortgage, funded renovations, or say the property forms part of the relationship asset pool.

The title may show only one legal owner, but the off title spouse may still try to protect their claimed interest. The usual way is a caveat. A caveat is a notice on the title that says, in plain terms, ‘I claim an interest in this land, and dealings should not be registered without dealing with me.’

The caveat does not prove the spouse is right. It does make the sale harder to complete until it is withdrawn, lapses or is removed.

Can a caveat stop settlement when the vendors are separating?

Yes. A caveat can stop your transfer from being registered, which means settlement cannot complete in the clean way your lender and conveyancer need.

A non title spouse may lodge a caveat under section 89 of the Transfer of Land Act 1958 (Vic). Once it is on the register, the Registrar of Titles will not simply ignore it because a buyer has signed a contract. The vendor must deal with it.

The buyer’s practical concern is timing. A caveat might be withdrawn if the separating couple reach agreement about the sale proceeds. If not, the vendor may take steps to have it lapse, or ask a court to remove it. Those paths take time, and time is exactly what buyers rarely have in the final week before settlement.

That is why the caveat needs to be found early. If you’re weighing up whether to proceed, our guide on can a property be sold if it has a caveat explains the buyer’s starting point, while this guide explains how vendors can remove a caveat before settlement.

Can a family law order freeze the sale?

Yes. A family law order can stop a vendor from selling or transferring the home, even if a buyer is ready to settle.

Under section 114 of the Family Law Act 1975 (Cth), the family courts can make injunctions in property disputes. In practical terms, one spouse may ask the court to stop the other from selling, transferring or dealing with the home while the property settlement is being worked out.

This is not a routine issue in every separation sale. It tends to arise where one spouse says the sale is being rushed, hidden, or used to defeat their claim. Still, if the agent says ‘we need an urgent sale because of the divorce’, your conveyancer should ask careful questions before you sign.

A special condition can help by requiring the vendor to give clear, registrable title at settlement. It cannot make a court order disappear. If an injunction blocks completion, the vendor has to deal with the court order before settlement can proceed.

Could the sale be challenged after settlement?

A completed sale can be challenged in rare cases if it was part of a plan to defeat a spouse’s property claim. Section 106B of the Family Law Act 1975 (Cth) gives the court power to set aside certain transactions.

For an ordinary buyer paying market value, the risk is usually low. The concern is far higher where a property is transferred for little or no money, sold to a relative, moved into a trust, or dealt with in a way that looks designed to keep it away from the other spouse.

A genuine arm’s length buyer is in a much stronger position when they pay a fair price, have no knowledge of any improper purpose, and have completed proper conveyancing checks. The safer course is simple: do not treat a suspiciously cheap divorce sale as a bargain until your conveyancer has checked the title, contract and surrounding facts.

What changed in family law on 10 June 2025?

The 10 June 2025 family law changes changed how separating couples’ property matters are assessed, not how a buyer completes a Victorian conveyance.

The Family Law Amendment Act 2024 (Cth) introduced a clearer staged approach for family law property settlements and gave closer attention to the economic effect of family violence. Those reforms matter for the couple dividing their assets. They do not remove the need for buyer checks, and they do not let one registered owner sell the whole property without the other owner’s signature.

For buyers, the same practical questions remain: who is on title, who has signed, is there a caveat, is there any court order, and can the vendor give clear title on settlement day?

What should your conveyancer check before you sign?

Your conveyancer should check ownership, authority, title restrictions and settlement risks before you become locked into the deal.

A careful review should cover:

A fresh title search. This confirms every registered proprietor and flags caveats, mortgages, easements and other recorded interests.
Signed contract and transfer authority. Every registered owner must sign, or a valid attorney or other authorised person must sign for them.
Any power of attorney. If one seller is overseas, unwell, hard to reach, or refusing to engage, your conveyancer should inspect the authority before relying on a signature. We have a separate guide on power of attorney for property sales in Victoria.
Caveats and court orders. A caveat or injunction can delay or stop settlement, so it should be raised before you sign, not after your loan documents are ready.
A clear title special condition. The contract should require the vendor to give clear, registrable title at settlement, with all required signatures and removals dealt with.
Deposit handling. In a separation sale, be cautious about early deposit release. Keeping funds in trust helps keep your property deposit safe if the sale falls over because a seller cannot complete.
Priority protection after signing. Depending on timing, your conveyancer may use a purchaser’s caveat or priority notice to protect your interest on the title after exchange.

In our practice, we’ve seen separation sales move smoothly when both sellers are organised and represented. We’ve also seen trouble surface when one owner has moved interstate, stopped replying to the agent, and no one has authority to sign on their behalf. Finding that out before you sign is very different from finding it out two days before settlement.

Frequently asked questions

Can you buy a house from a divorcing couple in Victoria?

Yes. A separation does not stop a Victorian property sale, and many sales by separating couples settle normally. The key checks are whether every registered owner has signed, whether any power of attorney is valid, and whether the title is clear of caveats or court orders that would block settlement.

What happens if one owner won’t sign the contract?

If the property is in two names, one owner cannot sell the whole home without the other owner’s agreement or valid authority. A contract signed by only one registered owner may not bind the missing owner, which means you may not receive the clean title you expected. Your conveyancer should confirm ownership and signatures before you sign.

Can a family law caveat block my settlement when buying from a divorcing couple?

Yes. A spouse who is not on the title may lodge a caveat under section 89 of the Transfer of Land Act 1958 (Vic) if they claim an interest in the property. While the caveat remains, your transfer may not be registered, so the caveat must be withdrawn, lapsed or removed before settlement can complete properly.

Could a court undo my purchase after settlement?

It is possible but rare for an arm’s length buyer. Section 106B of the Family Law Act 1975 (Cth) allows a court to set aside some transactions made to defeat a spouse’s claim. A buyer who pays market value, has no knowledge of any improper purpose and completes proper checks is in a far safer position than someone involved in a cheap or private transfer.

Should I be worried about buying from a separating couple?

You should be careful, not frightened. The sale can be perfectly workable if both owners are on board and the title is clear. The reason for extra care is that separation can create signing delays, caveats, or court orders that may not be obvious from the agent’s sales pitch.

What if one of the sellers is overseas or can’t be reached?

Someone can sign for an absent seller only if they hold valid authority, such as a power of attorney that covers the sale of land. Your conveyancer should check the document, confirm it is current, and verify the identity and authority of the person signing. Without that, the sale can stall even if everyone thought the deal was agreed.

About the Pearson Chambers Conveyancing team

Pearson Chambers Conveyancing is a Melbourne focused conveyancing firm helping buyers review contracts, Section 32 statements and settlement risks across Victoria. We work with first home buyers, upsizers and investors who need plain English guidance before they sign. Sales involving separating owners are exactly the kind of matter where careful title checks and clear special conditions matter from day one.

Sources we consulted

Talk to us before you sign

If you’ve found a Melbourne property and the owners are separating, send us the contract before you sign. We’ll review the Section 32 statement, order the title search, check for caveats, confirm who must sign, and help you understand whether the settlement path is clean.

Email contact@pearsonchambers.com.au.

General information only, current as at the date of publication. Victorian conveyancing rules and legislation change frequently. Please contact the Pearson Chambers Conveyancing team for advice on your specific contract.