A binding financial agreement lets property investors with multiple holdings set out in advance how their portfolio will be divided if a marriage or de facto relationship ends.
It can quarantine specific properties, protect existing equity, and cover assets bought later, so a binding agreement can oust the court’s power to divide the property it covers, unless it is terminated or set aside.
To be binding, each person must first receive independent legal advice, and full financial disclosure is strongly advised, because hiding a material asset can let a court set the agreement aside.
For investors who have spent years building a portfolio, the gap between having a valid agreement and having none can be financially significant.
Here is how these agreements work when several properties are on the line, and where multi-property investors most often get caught out.
How Does a Binding Financial Agreement Protect Property Investors With Multiple Holdings?
A binding financial agreement (BFA) protects a property portfolio by recording, in a legally binding contract, how each holding will be treated if the relationship breaks down.
Instead of leaving the division of several properties to a judge’s discretion after separation, the couple decides the outcome themselves and writes it down while the relationship is stable.
This matters most for people who own more than one property, because the more assets there are, the more there is to argue about and the larger the potential adjustment against the investor.
A well-drafted agreement can confirm that particular properties stay with the person who brought them in, set out how equity built during the relationship is shared, and state what happens to rental income and future purchases.
A binding BFA can oust the court’s power to divide the property and financial matters it covers, unless the agreement is not binding, is terminated, or is later set aside. That certainty is the main reason investors with growing portfolios put one in place.
Which Type of BFA Applies to Your Situation?
The type of agreement you need depends on whether you are married or in a de facto relationship, and which state you live in.
Married couples anywhere in Australia use Part VIIIA of the Family Law Act 1975 (Cth), with a Section 90B agreement before marriage, a Section 90C agreement during marriage, and a Section 90D agreement after a divorce order.
De facto couples in most states and territories use Part VIIIAB of the same Act, under Sections 90UB, 90UC, and 90UD.
Western Australia is the important exception. De facto couples in Western Australia make their financial agreements under the Family Court Act 1997 (WA), through Sections 205ZN, 205ZO, and 205ZP, because Western Australia did not refer its de facto property powers to the Commonwealth.
Married couples in Western Australia still use the federal Family Law Act, so a couple’s marital status changes which law applies.
Getting the correct section and the correct Act is not a technicality because an agreement made under the wrong provision can fail to bind the parties at all.
What Parts of a Property Portfolio Can a BFA Cover?
A BFA can deal with property you own now and property you acquire later during the relationship.
Under Section 90B(2) of the Family Law Act, an agreement can address how property or financial resources held at the time of the agreement, or at a later time and during the relationship, are to be dealt with.
For a property investor, this means the agreement can be written to capture the next apartment or the next development site, not just the ones you already hold.
An agreement can also cover the mortgages secured against those properties, the equity that grows over the life of the relationship, and the rental income the portfolio produces.
It can set out spousal maintenance arrangements as well, which is relevant where one partner earns far more from the portfolio than the other.
A maintenance provision must name the party and state the amount, or the value of property attributed to maintenance, or the provision is void.
Even then, a court can still order maintenance if a party cannot support themselves without an income-tested pension, allowance or benefit when the agreement takes effect.
Drafting the agreement so it captures a moving portfolio, rather than a fixed snapshot, is one of the most practical steps an investor can take.
What Happens to Your Property Portfolio Without a BFA?
Without a BFA, every property you own can be drawn into the property pool and divided by the court, regardless of whose name is on the title.
The Federal Circuit and Family Court of Australia works through a process to decide what is just and equitable, identifying the assets and liabilities, weighing each person’s contributions, and then considering their current and future circumstances.
Properties held in your sole name, properties bought before the relationship, and properties bought during it can all be counted, because the court looks at the whole financial picture rather than just the title deeds.
From 10 June 2025, the way courts approach this changed under the Family Law Amendment Act 2024, which codified the four-step property settlement process into the Act itself.
The same reforms wrote the duty of financial disclosure in property and financial proceedings into the legislation itself, and made the economic effect of family violence a factor the court must consider.
These changes apply to property settlements determined under the Family Law Act, which covers married couples across Australia and de facto couples outside Western Australia.
The table below sets out how a portfolio is treated with a valid BFA compared with a court settlement.
| Consideration | With a valid BFA | Without a BFA (court settlement) |
| Who decides the split | The couple, agreed in advance | The court, or the parties negotiating in its shadow |
| Certainty of outcome | High, provided the agreement holds | Lower, as the result turns on judicial discretion |
| Quarantining specific properties | Possible, where drafted clearly | Not guaranteed, as all property can enter the pool |
| Timing | Settled before or during the relationship | Resolved after separation, sometimes over years |
| Typical cost | Often more predictable upfront, especially with fixed-fee BFA work | Variable, and can rise sharply if contested |
| Can it be undone | Yes, on limited legal grounds | Court orders are generally final once made |
The key takeaway is that a BFA moves the decision from a courtroom, where the outcome is uncertain, to the kitchen table, where the couple keeps control.
That control is worth the most when the asset pool is large and the properties are hard to replace.
Why Do Multi-Property Investors Face Greater Risk in a Separation?
Investors who own multiple properties carry more risk in a separation because they hold a large share of the value and usually carry heavier debt against it.
Reserve Bank of Australia analysis of new tax and census data found there were 2.3 million individual housing investors as at 2022/23, equal to roughly 10 per cent of the working-age population.
Around 70 per cent of those investors own just one property, while the remaining 30 per cent own multiple properties and hold about half of all investment properties in the country.
The share of investors owning more than one property has risen by 7 percentage points over the past two decades, so multi-property ownership is becoming more common, not less.
For this group, a relationship breakdown does not put one home at stake, it puts a whole portfolio and its combined equity at stake, which raises both the financial and the emotional cost of getting it wrong.
How Are Mortgages and Negative Gearing Handled?
A BFA can allocate the mortgages tied to each property, but it cannot rewrite the loan contracts you hold with your bank.
If you keep a property under the agreement, you generally keep the debt against it, and a lender is still entitled to pursue whoever signed the loan, regardless of what the BFA says between you and your partner.
This is why the agreement should deal with refinancing and release, setting out who will take steps to remove the other person from a loan after separation.
Negatively geared portfolios add another layer because the tax position, the interest costs, and the ongoing shortfalls all shift when the properties are split.
An agreement that records who bears these costs and from which date removes a common source of dispute for investors whose properties run at a paper loss.
What About Properties Held in Trusts or Companies?
Properties held through a family trust or a company are more complex because those structures are separate legal entities, and a BFA binds only the people who sign it, though a trustee, company, or other third party can be made a party to the agreement.
A court will look at who controls the structure, the history of benefits received, the trustee’s powers, and the terms of the trust deed or company.
Depending on those factors, an interest may be treated as property, as a financial resource, or in some cases as a mere expectancy, so trust assets are neither automatically counted nor automatically out of reach.
Where a portfolio sits inside these structures, the agreement needs to be drafted with the structure in mind, and it may need to acknowledge the interests of others who deal with the trust or company.
Investors who have built their holdings through a corporate or trust structure should treat the BFA as one part of a wider asset-protection plan rather than a standalone fix.
Getting the interaction between the structure and the agreement right is a task for careful drafting, not a template.
Important Considerations When Making a BFA for a Property Portfolio
Beyond the core protection a BFA offers, several practical factors decide whether the agreement will actually hold when it is tested.
For a multi-property investor, these considerations often make the difference between an agreement that survives and one that unravels at the worst possible moment.
How Do You Stop a BFA From Being Set Aside?
You reduce the risk of a BFA being set aside by making it fair, transparent, and free of pressure, and by giving both people genuine time to consider it.
The leading authority is Thorne v Kennedy [2017] HCA 49, where the High Court set aside two agreements made by a wealthy property developer and his partner, finding they were affected by unconscionable conduct, with the majority also finding undue influence.
The agreements had been signed shortly before and after the wedding, on a take-it-or-leave-it basis, and heavily favoured the wealthier party, and ticking the technical boxes was not enough to save them.
The lessons for investors are direct: start the conversation early, allow real negotiation, provide complete financial disclosure, and avoid an agreement so one-sided that a court later views it as unfair.
A court can set an agreement aside under Section 90K of the Family Law Act on grounds that include fraud, non-disclosure of a significant asset, unconscionable conduct, and a serious change in circumstances involving a child.
Full disclosure is essential, and for a property investor, it means every holding, every mortgage, and every income stream is laid out.
It is not a formal validity requirement, but material non-disclosure can be treated as fraud and is one of the surest ways to have the agreement set aside later.
Should You Update Your BFA as Your Portfolio Grows?
You should review a BFA whenever your portfolio changes in a meaningful way, such as buying or selling a property, refinancing, or restructuring how the assets are held.
An agreement written around three properties may not sit comfortably once you own six, especially if the newer purchases were not contemplated in the original drafting.
While a well-drafted agreement can be written to capture future acquisitions, a periodic review keeps the document aligned with the real shape of your holdings.
Life events such as marriage, a new child, or a move interstate can also affect which law applies and whether the agreement still does what you intended.
In particular, if de facto partners make a de facto financial agreement and then marry each other, that agreement ceases to be binding, so a fresh agreement under the marriage provisions is generally needed.
Treating the BFA as a living document, rather than a one-off signed and forgotten, is the safest approach for an active investor.
Need Help Protecting a Property Portfolio With a BFA?
A binding financial agreement gives property investors with multiple holdings a way to decide the future of their portfolio themselves, rather than leaving it to a court after separation, provided the agreement is fair, fully disclosed, and correctly drafted for their state and relationship.
As binding financial agreement lawyers working with clients across Australia, my law firm can help you put a clear, valid agreement in place at a transparent fixed fee.
Contact my law firm today by calling 1300-529-888.
Frequently Asked Questions
Can a BFA protect investment properties I buy in the future?
Yes. A BFA can be drafted to cover properties you acquire later during the relationship, not just those you already own. Section 90B of the Family Law Act lets an agreement deal with property held at the time it is made or at a later time. Clear drafting and periodic reviews keep it effective.
Do de facto property investors in Western Australia use a different law?
De facto couples in Western Australia make financial agreements under the Family Court Act 1997 (WA), not the federal Part VIIIAB provisions used elsewhere, because the state kept its de facto property powers. Married couples in Western Australia still use the federal Family Law Act 1975, so your relationship status decides which law applies.
Will a BFA cover the mortgages on my investment properties?
A BFA can set out who keeps each property and its related debt, but it cannot change your loan contracts with the bank. Your lender can still pursue anyone who signed a loan. A good agreement therefore records who will refinance and seek the other person’s release from each loan after separation.
Can a BFA be set aside by a court?
Yes. A court can set aside a BFA under Section 90K of the Family Law Act on limited grounds, including fraud, failing to disclose a significant asset, and unconscionable conduct. Thorne v Kennedy showed that an agreement can fall even when the technical steps were followed, so fairness and full disclosure keep it standing.
How does owning multiple properties change a family law settlement?
Owning multiple properties raises what is at stake, because all of them can be drawn into the property pool that the court divides. Reserve Bank data shows investors with multiple properties hold about half of all investment properties in Australia. A larger, more leveraged portfolio means a bigger potential adjustment, which is why a BFA is often recommended.