Co-Ownership of Land

Question 1

What are the 2 forms of Property Ownership?

Answer 1

1. Co-Ownership

2. Sole Ownership

Question 2

What does it mean when property is co-owned?

Answer 2

That all the owners have the right to use and enjoy the land.

Question 3

What is Joint Tenancy?

Answer 3

Ownership of the same property by 2 or more people.

Question 4

List the main features of Joint Tenancy.

Answer 4

• Usually the form of ownership used by married or de-facto couples
• Own an undivided interest in the property as a whole - equal shares
• Can’t sell or dispose of their interest independently of the others
• Can’t pass their share to any person upon their death through a will
• The estates are vested (fixed and unalterable by any condition) for exactly the same period of time i.e the tenant’s lifetime
• Hold their property under the same Title
• All have the same rights to keep or dispose of the property
• If one dies, that interest automatically transfers to the other joint tenant(s) in equal parts
  (called the ‘right of survivorship’)

Question 5

What is ‘Tenancy in Common’?

Answer 5

Like Joint Tenancy, ‘Tenancy in Common’ is the ownership of the same property by 2 or more people, however they own defined but undivided shares.

Question 6

List the main features of Tenancy in Common

Answer 6

• Shares don’t have to be equal, although they often are
• Can hold separate Title to their interest in the land, can sell this interest, or if they die, can will it to any other person
• If one dies, the interest does not automatically transfer to the other - no right of survivorship

Question 7

What form of ownership is ‘Tenancy in Common’?

Answer 7

Tenancy in Common is a form of ownership used when co-owners are not married, or are not trustees?

Question 8

Give two examples of Tenancy in Common.

Answer 8

1. Business partners who buy land as an investment may choose to buy it as ‘tenants in common’ as this allows them to dispose of their shares as and when they choose.
2. Cross Lease

Question 9

What is a Civil Union and how do they relate to the Property (Relationships) Act 1976?

Answer 9

Under the Civil Unions Act 2004, civil unions were established as a legally recognised form of relationship, and civil union partners who break up are now treated the same as de-facto and married couples under the Property (Relationships) Act 1976.

Question 10

Under the Property (Relationships) Act 1976 - How is property of married, de-facto and civil union partners divided in the event they separate or one dies?

Answer 10

The property is divided equally between the couple.

Question 11

Under the Property (Relationships) Act 1976, when property is divided after a couple separates or one dies, what other factors are considered?

Answer 11

• Whether one partner owned the home at the date the relationship began
• The contributions of de-facto partners

Question 12

What section of the Property (Relationships) Act 1976 deals with disputes concerning division of property when a couple breaks up?

Answer 12

Section 1G, Part 4 (division of relationship property)

Question 13

Outline Part 4 of Section 1G of the Property (Relationships) Act 1976.

Answer 13

Sets out how the property of a husband & wife or civil union partners or de-facto partners is to be divided when they separate and cannot agree on the matter.

Question 14

List the matters dealt with by Section 1G, Part 4 – Property (Relationships) Act 1976.

Answer 14

(a) on what basis is the relationship property to be divided?
(b) what happens if the spouses or partners have been living together for less than 3 years?
(c) can the court do anything to redress any disparities between the income and living standards of the spouses or partners after the relationship ends?
(d) how are the different contributions of the partners assessed?

Question 15

If a de-facto partner genuinely believes they have the right to sign a contract to sell the property does that mean they have signing rights?

Answer 15

No. The person’s name must be present on the Title otherwise they have no signing rights.

Question 16

If a partner, or ex partner believe they have a right to a share in the proceedings from the sale of a house, what must they do?

Answer 16

Make a claim through the courts and seek legal advice.

They may also place a caveat on the Title to protect their interest, however; only those names cited on the certificate of title have rights to sign the contract itself.

Question 17

What relationships does the Property (Relationships) Act 1976 apply to?

Answer 17

• all relationships of 3 years or more
• marriages or civil unions of less than 3 years
• where a de-facto relationship has developed into a civil union or marriage, and the combined durations is 3 years or more

Question 18

The Property (Relationships) Act 1976 classifies property under two categories. What are they?

Answer 18

• relationship property

- separate property

Question 19

Are de-facto couples who have been together for less than 3 years covered by the Property (Relationships) Act 1976?

Answer 19

No, not usually

Question 20

What is a Trust?

Answer 20

A Trust is a legal device that is set up when the ‘settlor’ (usually the person or persons who currently own assets) transfer ownership of assets to the trustees to be held on trust for certain persons (the beneficiaries).

There will be nominated trustees and beneficiaries and a Trust Deed sets out the conditions of the Trust.

Question 21

Explain the role of the Trustees?

Answer 21

Trustees own and manage the assets for the benefit of the beneficiaries of the trust and will be guided by the terms of the Trust Deed.

Question 22

How are the names of Trustees recorded on a Certificate of Title for a property held in a Trust?

Answer 22

On a Certificate of Title for a property held in a Trust, the names of the Trustees are recorded as ‘owners’.

Question 23

How many ‘owners’ names appear on the Title when a property is held by a family trust?

Answer 23

Usually three.

1. Husband
2. Wife
3. Third Trustee (may be solicitor)

Question 24

Who must sign contractual agreements in relation to property held in Trusts?

Answer 24

All those named on the Certificate of Title must sign any contractual agreements.

There will not be a legally binding contract until all have signed.

Question 25

In relation to Trusts, what happens when companies are involved in the sale or purchase of property?

Answer 25

The names of the directors of the company need to be established and what the legal signing rights are. (e.g whether one or more directors must sign or if one director has sole signing rights). If a company has two directors and both have to sign, a listing granted and signed by one director does not guarantee that the listing is valid.

Question 26

What are the two types of Power of Attorney?

Answer 26

1. Ordinary Power of Attorney | 2. Enduring Power of Attorney

Question 27

What is Ordinary Power of Attorney?

Answer 27

Ordinary Power of Attorney is where someone gives a person(s) the authority to act on their behalf in relation to all of their affairs or only a particular issue(s). It can be for a fixed term or on going. E.g If a person is going out of the Country and they own a property, the Power of Attorney may allow the Attorney to sign documents related to the property on their behalf. Important: The Power of Attorney should be sighted by the real estate professional and a copy kept on file.

Question 28

What is Enduring Power of Attorney?

Answer 28

And Enduring Power of Attorney is a legal document where a person (the 'donor') appoints an agent (the 'attorney') and authorises them to do certain things on the donor's behalf. E.g Sign documents and carry out transactions.

Question 29

Why is it called an 'enduring' Power of Attorney?

Answer 29

The are called 'enduring' powers of attorney because the power granted in the document endures through the donor's mental incapability or can only be used once the donor is declared mentally incapable.

Question 30

When does an Enduring Power of Attorney come into effect?

Answer 30

The donor determines when it will come into effect when the Power of Attorney is drafted.

Question 31

What are the criteria to be an approved Attorney for an Enduring Power of Attorney?

Answer 31

The Attorney must: - be at least 20 years old - not bankrupt or subject or an order under the Act It is also possible to appoint a statutory Trustee Corporation to act as Attorney.

Question 32

If land is to be sold, all owners whose names appear on the Title must sign the contract. What should you do if one of the owners say that they can sign for everyone? What is best practice?

Answer 32

The owner must produce a properly executed Power of Attorney as proof of their claim. Best practice would be that a copy of the POA document is filed alongside the agency agreement and the sale and purchase agreement.

Question 33

What is Maori Land ownership governed by?

Answer 33

Maori Land Act 1993.

Question 34

The Maori Land Act 1993 defines six types of land ownership. What are they?

Answer 34

1. Maori customary land 2. Maori freehold land 3. General land owned by Maori 4. General land 5. Crown land 6. Crown land reserved for Maori

Question 35

Can Maori Customary Land be sold?

Answer 35

Maori Customary Land cannot be sold unless the Maori Land Court converts it to Maori Freehold Land or General Land. Most Maori Customary Land has never been converted to fee simple title or brought into the land registration system.

Question 36

What are the two significant achievements of the five year project between the MOJ and LINZ, registering all existing Maori Freehold Land Titles and Orders under the Land Transfer Act 1952?

Answer 36

1. The reverse of anomalies (variations) between the Land Transfer registry and the Maori Land Court registry 2. The creation of equal recognition and quality of title for Maori freehold land in the same way as general land This means Maori landowners now have increased ability to obtain finance, and address other issues that require parcel identification of land (a formal certificate of title) in order to set up economic development initiatives.

Question 37

If you are searching a Title to Maori Freehold Land, where should you check these records?

Answer 37

You should check records both through LINZ and through the Maori Land Court. The Court holds all title records for all Maori Freehold Land.

Question 38

Does the Property (Relationships) Act 1976 apply to Maori Land?

Answer 38

No.