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This article is focused on New Zealand law and explains issues from a Common law perspective.
How to apply for a joint family home within NZ
An application to register your New Zealand home as a joint family home is dealt with by the District Land Registrar. You should address your application to the local office of the Land Titles Service, which you can contact through the regional offices of Land Information New Zealand. Applications must be completed in the prescribed manner.
Why apply for a joint family home?
There are many risks involved in having a small business that can be lessened by registering your land under the JOINT FAMILY HOMES ACT 1964. The advantage that this gives you is that your home is partially protected against claims by creditors.
When can land be registered under the Act?
The land may be registered in this manner if you and your spouse (or de facto partner) meet the following requirements:
- You are the registered proprietors of the land.
- You are able to pay all debts.
- You are not the joint owners of any other home registered under the Act.
- You live in a dwelling on the land.
- The dwelling is used principally as a home.
There may be difficulties in satisfying this last requirement if the dwelling is used partly for non-residential purposes.
If any of the conditions for registration cease to be satisfied your settlement may be cancelled.
How does registering provide protection against creditors?
The effect of the registration is that your land is settled as a joint family home. Therefore an interest of $103,000 from the proceeds of the sale of the home will be protected from any creditors.
Advertising your application
As part of your application you may request that the Land Titles Service advertise your application in newspapers, in the Public Notices section. This informs creditors and potential creditors that you are applying.
If you choose not to advertise and are adjudicated bankrupt within two years of making the application, you will not receive the protection of the Act, as the registration will be void as against the Official Assignee.
Creditors may oppose registration
If you decide to advertise your application, a creditor may respond by lodging a caveat opposing registration. If this happens, you may:
- withdraw your application, or
- take no action, in which case your application will lapse after one month, or
- require the caveator to appear before the High Court to show cause why the caveat should remain
If you take the matter to the High Court, after considering the facts the judge may either order the caveat to be removed or maintain it. The caveat will be maintained if the creditor shows that he or she has good cause, that the debt is a substantial amount, and that maintaining the caveat will not cause an injustice to you.
Registration of applications
If they are no caveats pending and your application satisfies the other requirements, the Registrar will enter a Memorandum on the Certificate of Title specifying who the parties are and the date of settlement.
- The Land Titles Services (of Land Information NZ) advises prospective applicants that their applications should be handled by a lawyer.
- A lawyer will be able to explain to you more fully the effect of a joint family home settlement, such as what happens if you separate or one of you dies.
- If you are starting up a venture in which you wish to protect your assets, a lawyer will also be able to advise you as to how this can best be achieved (see How to create a trust).
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