Co-Buying Protections

Buying a House Together When Unmarried

A legal guide to purchasing NZ residential property with a partner, friend, or family member. Protect unequal contributions and structure your title correctly.

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The Survivorship Risk

If you register your property title as **Joint Tenancy** (the default on standard contracts), the *right of survivorship* applies.

Bypassing the Will: If one partner dies, their share automatically passes to the survivor. For partners contributing unequal deposits or with children from previous relationships, this must be avoided by registering as **Tenancy in Common**.

Title Registration Formats in New Zealand

1. Joint Tenancy

Under a Joint Tenancy, all owners hold an equal, undivided interest in the entire property. Neither owner holds a separate "share." If one owner passes away, their interest ceases, and the surviving owner automatically acquires sole title to the property through survivorship. This format is standard for married couples with aligned estate plans.

2. Tenancy in Common

Under a Tenancy in Common, owners hold defined shares in the property (e.g. 70/30, 60/40, or 50/50). If one owner passes away, their share does *not* go to the survivor—instead, it passes to the beneficiaries named in their Will. This format is essential when partners contribute unequal cash deposits or when friends buy together.

Title Vetting Checklist:

**Select Title Option**: Choose Tenancy in Common for unequal shares.
**Draft Wills**: Align your Will to specify who inherits your property share.
**Define Shares**: Register exact percentages on the LINZ transfer deed.
**Separate Mortgages**: Ensure the bank consents to the registered share format.

Unequal Contribution Vetting Checklist

Identify the recommended legal agreements to protect your contributions:

Contribution Scenario

Recommended Legal Deed

Legal Protection Achieved

Unequal Cash Deposits (Couples)

Section 21 Contracting-Out Agreement.

Ring-fences deposits from de facto 50/50 split claims.

Co-Buying with Friends/Family

Property Sharing Agreement + Tenancy In Common.

Protects fractional shares, details exit buyout paths.

Parental Gifted Deposits

Deed of Debt (demand loan) rather than Deed of Gift.

Protects parents' capital from partner relationship claims.

Unequal Mortgage Payments

Property Sharing Agreement (PSA).

Ensures ongoing maintenance/rates bills are split proportionally.

Protecting Parental Contributions

The Gift vs. Loan Distinction

Parents frequently contribute funds to help their children buy their first home. Often, banks require parents to sign a **Deed of Gift** certificate certifying that the funds do not need to be repaid, which banks require to calculate mortgage serviceability.

**The Danger**: If the child's relationship breaks down after 3 years, the gifted deposit is classified as relationship property, meaning 50% of the parents' hard-earned capital goes to the ex-partner.

**The Deed of Debt Solution**: We structure these contributions as a **Deed of Debt** (interest-free demand loan) combined with a Section 21 Agreement. This legally establishes that the funds are a liability of the partnership, ensuring the parents' funds are returned in full upon separation or sale.

Parental Protection Stages:

**Draft Deed of Debt**: Document the deposit contribution as a demand loan.
**Align Section 21**: Couple signs agreement acknowledging the parental loan.
**Bank Consent**: Coordinate terms with the mortgage provider.
**Secure repayment**: Return funds to parents upon property sale.

Instruct Our Property & Relationship Solicitors Today

Protect your property deposits. Vett purchase titles, draft Property Sharing Agreements, prepare Deeds of Debt, or execute Section 21 Contracting-Out agreements. Request a quote today.

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Frequently Asked Questions

If you have been living in the property together for **3 years or more** as a de facto couple, the family home is classified as relationship property under the PRA. The equity is divided 50/50, meaning the partner who contributed the deposit loses 50% of it, unless you signed a Section 21 Contracting-Out Agreement ring-fencing that deposit as separate property.

Yes. If you register your property title as **Tenancy in Common** to protect unequal shares, your share of the property does *not* automatically go to the other owner upon death—it goes to your estate. You must have a valid Will specifying who inherits your property share (e.g. your partner, children, or parents) to prevent legal confusion.

A Property Sharing Agreement (PSA) is a contract that governs the ongoing management and exit rules between co-owners (such as friends or siblings buying together). A "pre-nup" (Section 21 Contracting-Out Agreement) is a specialized deed under the Property (Relationships) Act 1976 that protects partners' assets from relationship property claims upon separation. Couples co-buying property often need both.

Instruct Quay Law for Your Transaction

Contact our Remuera office to discuss your sale or purchase contract, title checks, or financing arrangements.