Getting it right when it comes to relationship property can save a lot of headaches down the track. Sections 21 and 21A of the Property (Relationships) Act 1976 allow you to "contract out" of the usual equal sharing rules that apply if a relationship ends, either through separation or death.

Formal Requirements for a Relationship Property Agreement

So, what does it take to make one of these agreements legally binding? The Act has some pretty specific formal requirements that need to be met.

• The agreement must be in writing. Verbal agreements are techincally possible to enforce but I wouldn't recommend it!
• Both parties must sign the agreement.
• Each party must receive independent legal advice before signing. This means you each need your own lawyer, separate from your partner's, to advise you (they can't even be from the same law firm - they need to be totally independent).
• A lawyer must witness the signature of each party.
• The lawyer who witnesses a party's signature must certify that, before that party signed the agreement, the lawyer explained its effect and implications to them. This is a critical step to ensure both parties fully understand what they are signing away.

Why These Formalities Are Needed

Now, you might be thinking, "That's a lot of hoops to jump through!" And you'd be right. But these strict requirements are in place for some very good reasons, primarily to protect both parties and ensure fairness.

• Protecting against undue influence: Relationships can be complex, and sometimes one person might have more power or influence than the other. Having independent legal advice ensures that each person understands their rights and isn't being pressured into an agreement they don't fully comprehend or agree with. It's like having a referee in your corner, making sure you're playing fair!
• Ensuring informed consent: The lawyer's certification confirms that the party truly understood the agreement's consequences. It's not enough to just skim through it; they need to grasp the legal ramifications. This helps prevent someone from later claiming they didn't know what they were signing.
• Preventing future disputes: By making the process robust and clear upfront, these formalities aim to reduce the likelihood of arguments and court battles later on. A properly executed agreement provides certainty and clarity for both parties, which is invaluable if things go pear-shaped.
• Upholding the integrity of the law: The Property (Relationships) Act generally provides for equal sharing. If couples want to deviate from this, the law requires a high standard of formality to ensure that any departure is genuinely by mutual, informed consent.

The Importance of Full Disclosure

Beyond the formal requirements, there's another absolutely vital component to a robust relationship property agreement: full and frank disclosure of all assets and liabilities.

Imagine trying to split a cake when you don't even know how many slices there are, or if someone's hidden a whole extra cake in the pantry! It simply wouldn't be fair. In the same vein, for a relationship property agreement to truly stand up to scrutiny, both parties must lay all their cards on the table. This means revealing everything they own (assets) and everything they owe (liabilities), whether it's solely in their name or jointly held. We're talking about houses, cars, bank accounts, shares, KiwiSaver, businesses, debts, loans, and even that secret stash of cash under the mattress (or crypto wallet!).

The reason for this transparency is simple: without a complete picture of the financial landscape, neither party can give truly informed consent to the agreement. Their independent legal advice would be based on incomplete information, which could seriously undermine the fairness and validity of the agreement itself.

If full disclosure doesn't happen, there can be some pretty significant consequences. If it later comes to light that an asset or a significant liability was not disclosed before the agreement was entered into, the Family Court has the power to:

• Overturn the entire agreement: This means the agreement is essentially cancelled, and the property would then be divided according to the standard equal sharing rules of the Property (Relationships) Act, as if no agreement ever existed. All that effort and expense would have been for naught!
• Deal with the undisclosed asset separately: In some cases, the Court might decide that the agreement remains largely valid but will make a separate order regarding the previously undisclosed asset or liability. This could mean the asset is shared equally, or in a way that the Court deems just, notwithstanding the terms of the original agreement.

So, while it might feel a bit like airing all your financial laundry, full disclosure is critical. It's about building an agreement on solid ground, ensuring that both parties know exactly what they're agreeing to and preventing nasty surprises (and potential court action) down the track. Better to be open and honest now than face a financial nightmare later.

The Rise of Remote Signing and Digital Signatures

In our increasingly digital world, it's no surprise that the way we sign documents has evolved, and relationship property agreements are no exception. While the formal requirements remain, the method of signing has become more flexible. It's now quite common for these agreements to be signed remotely, often with the application of a digital encrypted signature.

Electronic signatures, particularly those generated through secure platforms like DocuSign, are recognised under the Contract and Commercial Law Act 2017. These digital signatures use encryption and audit trails to provide a high level of integrity and authenticity, making them very reliable.

What does this mean in practice? It means you might not need to be in the same room as your lawyer or even your partner to sign these important documents. Your lawyer can guide you through the process remotely, ensuring all the formal requirements are still met, even if you're signing from your couch in Morrinsville while your partner is on the other side of the country. Just remember, while technology makes things easier, those core legal protections, like independent legal advice and lawyer certification, are still the backbone of a valid agreement. So, no trying to DIY it with a quick snap of your signature on your phone and calling it a day!