With the ever-changing world, and skyrocketing prices of housing, more and more people in New Zealand/Aotearoa are looking to purchase property outside of the traditional sole purchaser or spousal arrangement. In these situations, it’s important to ensure you have sound advice up front and get the paperwork sorted before taking possession. If the untoward were to happen later on down the track, it’s best to have a Property Sharing Agreement in place to protect all parties.
Some of the questions you will need to think about and answer are:
- How much is each party initially contributing to the purchase price and how will this be protected? Will this be reflected in the ownership shares?
- How much will each party contribute to the outgoings? E.g., house insurance, mortgage and council rates.
- Will all parties be living in the house? If not, does either party have the right to rent their share of the property out to another individual?
- Are all parties equally responsible for the cost of maintenance and repairs? What about further property developments?
- What happens if one party decides they want to sell? How long does the other party have to decide if they wish to buy the other out before the property goes to open market? And how will the sale price be decided?
You will also need to consider the form of ownership and what would happen if one of you were to pass away. Would the other person automatically inherit, or would you like your share left to your Estate? It is imperative to complete a Will when completing a purchase with others.
There are two different ways you can elect to own property when it is to be registered in your personal names in New Zealand.
- Joint Tenants; or
- Tenants in Common.
Further information on these forms of property ownership is available here:
But what happens if you don’t get it right? What you need to remember is, things change. Relationship breakdowns between family and friends are normal, but when you own property together, the consequences of getting it wrong can mean it costs you thousands of dollars, whether it is in court fees, or the initial contributions were not set out clearly, resulting in the unfair distribution of sale proceeds.
To ensure that you are set up correctly from the start, contact one of our specialist team members
Meet our team of experienced Conveyancers looking after you across Nelson/Tasman and Motueka.
Jacintha Atkinson
Director
Christine Allison
Registered Legal Executive [Fellow]
Kirsty Goodall
Registered Legal Executive
