After living as a couple sharing with flat mates for 2 years Marie and Steve decided to buy their own place. Marie had always had a substantially higher salary than Steve.  Marie also received a large inheritance from her grandmother years earlier.  Marie put $100,000 towards the purchase price as a cash contribution, while Steve put $5,000.  They took a mortgage in their joint names, which they contributed to fairly equally over the years.

Marie and Steve, being the young and naïve lovebirds that they were, didn’t even consider that one day they might split up.

Here they are in May 2011 and hardly on speaking terms. Steve has made a claim for half of the value of the property, including any increase in value of the property.  Under the Property (Relationships) Act 1976, he has every right to do so.

If only they had entered into a Contracting Out Agreement (formerly known as a pre-nuptial) when they purchased the property, recognising their respective contributions to the property as separate property, then Marie would not have lost $95,000.

Under the Act, any relationship property owned by de facto, civil union or married couples will generally be divided equally between them on separation (provided they have been in a relationship longer than three years, and less in some circumstances).  This can be regardless of any difference in contributions to any particular property.

A Contracting Out Agreement contracts out of the 50/50 division and parties can agree on a different arrangement in the event that they separate.

Any property that one party wishes to keep as their own can be listed as separate property, which remains their own if they split up.

It is also common to contract out of the Act in relation to just a particular property.  In the above example, Marie could have had a provision stating that her initial contribution to the property would be paid to her in the event of a sale of the property or relationship breakdown.

Please note that Rainey Collins is not contracted to provide Legal Aid, other than in the Treaty of Waitangi area.  We therefore are unable to take on any Civil or Family Legal Aid work. If you require Legal Aid in those areas, you can search the list of Legal Aid lawyers on the Ministry of Justice website.