Contracting Out Agreement: A Must-Have Document in Christchurch Real Estate
The Christchurch real estate market is constantly evolving, and with it, comes the need for property owners to protect their investments. One way of doing so is by having a contracting out agreement in place.
What is a contracting out agreement?
A contracting out agreement, also known as a Section 77 agreement, is a legal document that allows property owners to “contract out” of certain provisions under the Property (Relationships) Act 1976. The act governs the division of property in the event of a relationship breakdown between tenants in common or joint tenants.
When two or more people purchase a property together, they are considered tenants in common or joint tenants. If there is no contracting out agreement in place, the property will be divided equally between the parties in the event of a relationship breakdown.
Why do you need a contracting out agreement?
Having a contracting out agreement in place allows property owners to protect their investments in several ways:
1. Protect your assets from a relationship breakdown: A contracting out agreement can prevent an unexpected division of property in the event of a relationship breakdown, which can save both parties time and money.
2. Ensure fair distribution of property: With a contracting out agreement, parties can agree on how property will be divided in the event of a relationship breakdown, ensuring a fair split of assets.
3. Protect your financial interests: A contracting out agreement can protect your financial interests by preventing one party from claiming ownership of more assets than they are entitled to.
4. Save time and money: A contracting out agreement can help to avoid costly and protracted legal battles that may arise in the event of a relationship breakdown.
How to get a contracting out agreement
If you are purchasing a property in Christchurch with another person, it is important to speak to a lawyer about getting a contracting out agreement. The process involves negotiating and drafting an agreement that meets the needs of both parties.
A contracting out agreement must be signed before or at the same time as the purchase of the property. It must also be in writing and signed by both parties in the presence of a lawyer.
If you are already in a relationship and own a property together, you can still enter into a contracting out agreement. However, it is important to note that it must be signed voluntarily and with independent legal advice.
Conclusion
In conclusion, a contracting out agreement is a vital document for property owners in Christchurch. It allows for protection of assets, fair distribution of property, and protects financial interests. If you are purchasing a property with another person, or already own property with another person, it is important to speak to a lawyer about getting a contracting out agreement. Doing so can save you time, money, and the stress of a relationship breakdown.