Property Sharing Agreements
Dec. 3, 2019
In this hot market, first home buyers are increasingly turning to novel solutions to enable them to get on the property ladder. Some first home buyers are now pooling their money with friends or family members, which may speed up the process of saving for a deposit considerably.
If you’re thinking about buying with family or friends, it’s a good idea to get a Property Sharing Agreement in place. At its’ most basic, this agreement will set out your contributions to the deposit and in what proportion you intend to own the house. For example, if you contribute 40% of the deposit and your sister contributes 10%, you may want to record in an agreement that you will own a greater share of the property.
Typically, a property sharing agreement will also include:
- Payment of outgoings (such as insurance and rates);
- Type of ownership to be registered on the Certificate of Title;
- The process to follow when selling;
- How long the arrangement is intended to last for; and
- If either party will have an option to purchase at the time of sale.
For an agreement to be legally binding, you’ll each need to get advice from different practising New Zealand lawyers, who will then certify the agreement.
Buying a house is one of the biggest financial commitments you’ll ever make, so it’s a good idea to set out your expectations early on through a formal agreement. If anything goes wrong or if it comes to a dispute, you can look back to the agreement to confirm what you both agreed to.
If you want to discuss whether a property sharing agreement is right for you, contact our experienced property lawyers on firstname.lastname@example.org.
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.