Contracting Out

Nov. 28, 2019

What is the Property (Relationships) Act?

The Property (Relationships) Act 1976 determines how relationship property is divided when a civil union, marriage or qualifying de facto relationship breaks up.  The Act operates as a one size fits all approach but does offer the ability for couples to come to their own agreement and ‘contract out’.  Parties can contract out of the Act before entering into a qualifying relationship, during their relationship, or to settle the division of property post-separation.



When would you need to ‘contract out’?

There are many reasons that you might want to contract out of the default division rules, such as if you have a particularly large estate, are entering a second marriage, if you and your partner come into the relationship with vastly different assets, or simply if you decide you want to come to your own arrangement. 


There are many items that you may not realise become relationship property under the Act, such as your income, the increase in value of your KiwiSaver and contributions from the start date of the relationship, certain debts, property used for common benefit of both partners, or separate property which increases in value due to the actions of your spouse.  You may wish to specifically provide for items such as these in an agreement.



What are the requirements for ‘contracting out’?

If you decide to contract out, your agreement will only be valid if you comply with formalities in the Act. These include recording the agreement in writing and ensuring that both parties sign it. 


A key requirement is that both parties must receive independent legal advice from a New Zealand lawyer with a valid practising certificate, who will then certify the agreement.  This means that you and your partner each need to get your own lawyer, and go to see them separately.   If you do not get independent advice, the agreement will be invalid, and the default provisions of the Property (Relationships) Act will apply.  



If you are contemplating entering a marriage, civil union, or de facto relationship, it pays to think about how you would want your assets to be divided in the unfortunate event of a breakup. 



Contact one of our experienced lawyers at to discuss your circumstances and get tailored advice.



Nina Becker
Staff Solicitor



Disclaimer: The information contained in this article is general in nature and not tailored to your personal circumstances. It is only current as at the date posted and should not be relied upon as legal advice. If you require legal advice, please contact us for further assistance.