Buying a House With Friends or Family in New Zealand

Buying Canterbury property with a friend, sibling, parent, or other non-partner co-buyer is increasingly common as prices rise and deposit requirements remain significant. It can be a genuine path to property ownership that would otherwise be inaccessible. It also creates legal and financial complexity that must be managed carefully from the outset.

Joint Tenancy vs Tenants in Common

Canterbury co-buyers must choose between two ownership structures. Joint tenancy means all owners hold equal shares and if one owner dies, their share passes automatically to the surviving owners (right of survivorship). Tenants in common means each owner holds a specified share (which can be equal or unequal) and can leave their share to whoever they choose in their will. For friends or non-family buyers who want the flexibility to dispose of their interest independently, tenants in common is the more appropriate structure. For parents and adult children buying together, the specific family circumstances will guide the choice.

The Co-Ownership Agreement

Before purchasing, all co-buyers should sign a co-ownership agreement (also called a property sharing agreement) prepared by their solicitor. This agreement should address: the respective ownership shares; how ongoing costs (mortgage, rates, insurance, maintenance) are allocated; what happens if one party wants to sell their share; what happens if one party cannot meet their payment obligations; the right of first refusal for remaining owners if a party wants to exit; how disputes are resolved; and what happens if one party dies. Without a written agreement, these issues are governed by general law in ways that may not suit anyone's specific intentions.

Finance Complications

All owners on the title are typically required to be borrowers on the mortgage, with all incomes contributing to serviceability. This creates a financial link between co-buyers - if one party defaults on their portion, the mortgage is still at risk. Some Canterbury co-buyers structure their lending with separate portions of the loan held by each party, which requires lender agreement and careful structuring. Discuss the lending structure thoroughly with your mortgage broker before proceeding.

Information from the New Zealand Law Society and property practitioners. For general information only - always obtain independent legal advice before entering a co-ownership arrangement.