Checklist: What to agree on before buying property with others
- Staircase Financial
- 2 days ago
- 5 min read
If you’re thinking about buying a property with others, you already know how hard it is to get into the New Zealand market on your own. The real problem isn’t finding people to buy with, it’s what happens when no one agrees on money, decisions, or responsibility.
This is exactly why you need a clear group property investment checklist. It gives your group one shared plan, protects everyone’s share, and stops small issues from turning into expensive problems later.
Key Takeaways
Agreeing on goals, money, and decision rules early prevents most disputes later.
Your ownership structure affects tax, bright-line rules, and how easy exits will be.
Every member must understand joint and several liability under NZ lending rules.
Clear rules for repairs, income, and buyouts keep the group stable when situations change.
A written agreement protects friendships and provides a legal reference if conflict arises.
Your pre-purchase agreement checklist
Before you buy together, this checklist for buying a property helps you avoid legal disputes, unexpected costs, and lending problems later on.
Your shared investment goal and holding timeline
Your group needs a clear purpose before you buy anything, because every decision flows from the investment goal. Decide whether the property is for long-term hold, rental income, renovation, a flip, or a multi-property strategy.
You should also agree on the expected holding period, such as 5, 7, or 10 years, and define what success looks like for each member so expectations stay aligned.
Ownership shares and title structure
Sorting out ownership shares early prevents confusion when profit, tax, or exit decisions come up. Groups must choose between equal or unequal shares and confirm whether they will use tenants in common, a company, or a trust as their structure.
This is also where documenting a clear group property investment exit strategy matters most, so ownership percentages, sale triggers, and buy-out rights are protected if someone needs to exit before the agreed timeline.
Initial contributions and future capital calls
Your group must agree on how much each person contributes at the start, because the deposit often sets the foundation for ownership percentages. You also need a plan for who pays ongoing expenses such as rates, insurance, and maintenance, so responsibilities stay fair over time.
Future capital calls for repairs, upgrades, or vacancy periods should follow clear rules, and Inland Revenue notes that shared owners must keep accurate records to support expense claims.
Decision-making and voting rules
Groups avoid most disagreements when everyone knows which decisions require full approval and which can be made by majority vote. Major choices should be agreed upon up front so no one feels pressured or overridden later. It also helps to assign daily management tasks to keep the property running smoothly.
Common decision rules include:
Decisions requiring unanimous approval: selling the property, refinancing, and major renovations
Decisions requiring majority approval: minor upgrades, tenant selection, routine expenses
Assigned tasks: communication with the property manager, organising repairs, tracking group expenses
Repairs, maintenance, and emergency costs
Groups avoid most disputes by setting clear rules for how repairs and maintenance will be approved and paid for. You should agree on spending limits before group consent is required and confirm who is responsible for organising work. Emergency costs also need a plan so the property can be protected without delays or disagreements.
Lending responsibilities and liabilities
When buying property together in New Zealand, all co-borrowers are jointly and severally liable. Each person is legally responsible for the full loan, not just their portion.
If one borrower defaults, the bank can seek repayment from any or all borrowers.
Banks assess the financial position of the entire group. If one person's income changes, it may affect the group's ability to refinance or make loan changes. Any refinancing, loan top-ups, or mortgage amendments require consent from all co-borrowers.
It is important to agree in writing on:
Who applies for and services the loan
What happens if someone cannot meet payments
How loan changes will be approved
How rent, profit, and loss will be split
Your group needs a clear method for splitting rental income so each person receives their fair share. Expenses must be divided in a way that reflects ownership shares and is easy to track for tax purposes. Profit from a future sale should follow the same structure, so no one is surprised by their payout.
Exit rules before anyone buys in
Exit rules must be set early because most problems arise when someone wants to leave without a plan. Your group should agree on a fair valuation method, a reasonable notice period, and simple steps for any buyout.
If the group cannot agree, the Property Law Act 2007 allows a co-owner to apply to the court for a sale or partition. If you’re still exploring whether investing with others is right for your group, our main guide breaks down the pros, risks, and options before you commit.
Dispute resolution framework
Start with an internal discussion where all parties clearly explain their concerns. If agreement cannot be reached, the next step is mediation with a neutral third party. Legal action may follow under the Property Law Act 2007, which provides mechanisms for resolving ownership disputes.
10. Legal documents required in New Zealand
Every group should have a co-ownership or shareholder agreement to outline roles and responsibilities. The legal structure you choose, such as a trust or company, affects liability and tax obligations under the Companies Act 1993 and the Trusts Act 2019. Insurance, accurate records, and legal compliance are also essential for protection.
Ready to set your agreement up properly?
If your group is about to buy together, using a clear group property investment checklist helps you avoid confusion, protect each person’s share, and prevent costly mistakes.
Getting guidance early gives you confidence that your structure, rules, and responsibilities are set up the right way. You can book a free consultation with Staircase here.
FAQs about buying property with others in NZ
Do all co-owners need to use the same lawyer?
No. Each person can use their own lawyer, and many groups prefer this to avoid conflicts of interest.
What happens if someone stops paying their share of the mortgage?
The bank can pursue any co-owner because lending is usually joint and several in New Zealand.
Can we change our agreement after we’ve already bought the property?
Yes, but updates may require legal amendments, new signatures and sometimes lender approval.
Is it risky to buy with friends if one person has a weaker credit score?
Yes. A weaker credit score affects the whole application because banks assess the group as a single borrowing unit.
Do we need a trust or company to protect our shares?
Not always, but these structures help when ownership is unequal or the group wants extra protection and clearer governance.
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