When you’re finalising a property settlement, two options let you create a legally binding agreement under the Family Law Act: a consent order and a binding financial agreement (BFA). Both can be affordable alternatives to litigation, but they suit different circumstances. Both are legally enforceable, unlike the informal agreements many separated couples rely on, and understanding the key differences helps you reach a financial settlement that holds.
Key takeaways
Consent orders and BFAs both formalise a property settlement under the Family Law Act.
Each option suits different situations, depending on your assets and circumstances.
A consent order is approved by the court; a BFA is a private contract.
Choosing the wrong instrument is a common and costly mistake.
What a consent order is
A consent order is a property or financial agreement approved by the Federal Circuit and Family Court of Australia (FCFCOA), available whether you’re married or in a de facto relationship. Once granted, it’s enforceable through the Court and difficult to challenge. Consent orders require court approval to be enforceable and are made under the Family Law Act 1975. Before approving them, the Court must be satisfied the orders are just and equitable. While this article focuses on property settlement, consent orders can also cover parenting arrangements, a BFA, by contrast, deals only with financial matters. For the full application process, costs, and timeframes, see our complete guide to consent orders in Australia.
Application deadline
There’s often a time limit within which parties need to begin their application to end their financial relationship with a court order. The current deadline is the following:
Married couples must begin their application within 12 months of their divorce order taking effect.
De facto partners must begin their application within 2 years of their separation date.
The Court can let parties apply outside of this deadline in only limited circumstances, including some applications brought well post separation. A BFA isn’t subject to the same deadline, as it can be made during or after a relationship.
Consent Orders vs Binding Financial Agreement
BFAs are another way couples can agree to a legally binding settlement. They’re a private written agreement that can be formed before, during, or after a relationship, without court intervention. A clear agreement entered into early can limit future claims by an ex partner. While they don’t need to be approved by the FCFCOA, they may get challenged in court. A BFA can be set aside due to technical defects, fraud, or a material change in circumstances.
You might be considering whether a consent order or a BFA is better for your situation. This can depend on different factors specific to your circumstances. Here are some scenarios that may give you an idea of which may be right for you. The table below sets out the key features of each option for property matters.
Factor | Consent order | Binding financial agreement (BFA) |
|---|---|---|
Approved by the court | Yes — the FCFCOA reviews it | No — it's a private contract |
Court reviews fairness | Yes, must be just and equitable | No |
Independent legal advice | Not mandatory | Required for both parties |
Typical cost | Often lower | Often higher |
Ease of challenge | Harder to set aside | Easier to challenge |
Time limit to apply | Yes (12 months post-divorce; 2 years post de facto separation) | Can be made any time |
Best suited to | Straightforward asset pools seeking certainty | Significant assets, a family business, protecting children's entitlements |
You may be considering a BFA if:
You’ve entered a relationship with significant assets. BFAs give you the opportunity to set out how a division will be made before you separate, and offer flexibility for complex financial arrangements.
You have a family business you want to protect. BFAs may give you the flexibility to make precise provisions for how you want concerns like business ownership to be handled, tailored to the unique circumstances and financial circumstances of each party.
You want to plan around future needs. A BFA lets both you and the other party set out how property and financial matters will be divided ahead of time.
If you have children from a previous relationship, a BFA can enable you to put specific conditions in place to protect their entitlements.
You may be considering a consent order if:
You have a straightforward asset pool. Many couples aren’t dealing with complex assets like a business or investment properties. Consent orders may have a simpler process.
You’re looking for certainty. BFAs may be more flexible, but they tend to be easier to challenge. While a court order can still be challenged, it’s generally harder to set aside than a BFA.
You want an affordable option. Consent orders are generally cheaper to obtain than a BFA. A BFA requires both parties to get independent legal advice to be legally binding, and can have a complicated negotiation process that adds to legal fees. Unlike consent orders, which the Court reviews, a BFA relies entirely on the drafting being legally sound. Consent orders may be pursued without legal representation.
How to apply for a consent order
If a consent order is the right fit, the process runs from reaching agreement and disclosing your finances through to filing with the FCFCOA. Applications can be filed electronically with the Court through the Commonwealth Courts Portal, where you submit your proposed consent orders and supporting documents, and court processing can take several weeks before the property orders are made. We cover each step in detail in our guide to consent orders in Australia.
The most common mistake: choosing the wrong instrument
The biggest pitfall isn’t the paperwork, it’s selecting the wrong tool for your situation. Couples with significant assets or a family business sometimes lock themselves into a consent order when a BFA would have given them more flexibility. Others pay for a BFA and two sets of legal advice when a straightforward asset pool only needed a consent order.
Two other errors apply whichever route you choose: mishandling superannuation interests, which require an accurate valuation before you split superannuation and written notice to the trustee, and incomplete financial disclosure. Full disclosure of all assets, financial resources, and supporting documents, such as pay slips and bank statements, is essential, as non-disclosure can have serious consequences and see an agreement set aside. We explain splitting in detail in our guide to superannuation in divorce.
Conclusion
Consent orders and BFAs both formalise a property settlement, but they protect you in different ways. A consent order gives you court-reviewed certainty; a BFA gives you private flexibility. The right choice depends on your assets, your relationship, whether a marriage or de facto, and how much certainty you want for the future. Before you finalise any proposed orders, it’s worth getting advice on which instrument fits.
Not sure which option suits your property settlement?
Our consent order lawyers and property settlement lawyers can help you choose the right instrument and protect your interests. Contact us for a free consultation.
