When to use:
These documents help to regulate a situation where two or more parties (this could be individuals, couples or groups of people) share ownership and use of a house, flat or other property for holiday occupation.
They regulate occupation where only one owner occupies the whole of the property at any one time. However, there is nothing to prevent more than one owner occasionally using the property at the same time.
Simply, they are ideal if you have a second holiday home in Queensland which is jointly owner with your extended family. Of course there are many other situations it will cover too.
Initially, you should decide on the most appropriate structure for your sharing plan. If you are looking at a commercial arrangement or one for more than ten people, then it would be better to hold the property in a limited company and buy and sell shares in it. No stamp duty is paid once it is bought as the right of occupation can be treated as a licence.
Of course running a company costs money. Thus, it is merely a choice as to whether you want the formality, cost yet greater certainty of a company structure or the lower cost and comparative informality of an agreement like one of these.
We offer two versions here. One is for a situation where only two parties share - two individuals or two families, or other groups. The other is designed for more than two parties.
A note on property ownership in law:
In New Zealand law, the registration of ownership does not record the shares in which land (that is, property) is held. So If you own 60% and I own 40% we should record that in another document. Otherwise, the Law will assume we own in the shares in which we contributed to the purchase price, which may not be what we intended. These Net Lawman agreements specifically record the shares. They also record shares which may be owned by someone who is not a registered owner. This is called a beneficial interest.
NZ-PR543 includes provision for:
· Terms of beneficial interest - beneficial trusts provision
· Price and payment for the Property
· How many people allowed into occupation at one time and who they may be
· Who and how will manage payment of expenses
· Management of the property
· Parties’ responsibilities
· Alternative exit strategies
· Effect of termination
· What if someone wants to sell his share or sell the property
· other necessary legal provisions
NZ-PR544 includes similar provision, but provides for a management structure ordered by annual meetings of the owners, possibility of proxy voting, and more. The exit strategy allows for a share to be sold to a third party, after offering it to all other owners.
