A contracting out agreement — New Zealand's equivalent of a prenuptial agreement — is a written contract that lets couples opt out of the default equal-sharing rules in the Property (Relationships) Act 1976. Under section 21 of the PRA, married couples, civil union partners, and qualifying de facto couples can set their own rules for how property is owned and divided, replacing the Act's 50/50 default with whatever arrangement suits them.
What Section 21 of the PRA Actually Does
The Property (Relationships) Act 1976 (PRA) contains New Zealand's default rules for dividing property when a qualifying relationship ends. The default position is equal sharing: once a marriage, civil union, or de facto relationship of three or more years ends, the family home and relationship property are divided 50/50 regardless of who earned more or whose name is on the title.
Section 21 gives couples the power to contract out of that regime entirely. A section 21 agreement can:
- Declare specific assets to be separate property, not subject to sharing
- Set different percentage splits for different categories of property
- Specify what happens to a particular asset — such as a business or inherited property — if the relationship ends
- Govern how property is treated during the relationship, not just on separation
The term "contracting out agreement" and "prenuptial agreement" are often used interchangeably in New Zealand, though strictly speaking a prenup is made before marriage, while a contracting out agreement can be made at any point — before, during, or after the relationship begins.
You can download a free contracting out agreement template from forms-legal.com to draft your arrangement, but the signed document must meet the formal requirements below before it becomes enforceable.
The Formal Requirements Under Section 21F
A contracting out agreement that does not meet the formalities in section 21F of the PRA is void. There are no exceptions and no court discretion to overlook a missing requirement.
The requirements are:
1. In writing and signed
The agreement must be in writing and signed by both parties.
2. Witnessed
Each party's signature must be witnessed by a person who is not the other party to the agreement.
3. Independent legal advice — for each party separately
Before signing, each party must receive independent legal advice from a separate lawyer about the effect and implications of the agreement. Both lawyers must certify this in writing and attach their certificates to the agreement.
This is the requirement that catches most people. "Independent" means each person's lawyer cannot act for the other. If you and your partner both use the same solicitor, the agreement is unenforceable. The New Zealand Law Society has confirmed that this is a strict requirement — not a formality that can be waived.
The legal advice must be genuine advice specific to that person's situation. A lawyer who rubber-stamps an agreement without explaining its implications has not met the standard. If a court later finds the advice was inadequate, the agreement may be treated as if no advice was given.
When Courts Will Set Aside a Section 21 Agreement
Section 21J of the PRA gives the Family Court power to set aside or modify a contracting out agreement if giving effect to it "would cause serious injustice." This is the provision most often raised in disputes.
The court considers:
- How long it has been since the agreement was made
- Whether the parties understood the agreement when they signed it
- Any change in circumstances since signing (children, major career changes, illness, a new business)
- Whether one party failed to make full financial disclosure before the agreement was signed
- Whether the agreement was entered into under duress or undue influence
Section 21J is not a backdoor to undo every inconvenient agreement. New Zealand courts approach it cautiously because the PRA is designed to allow couples to self-determine. The Court of Appeal has confirmed in cases such as Harrison v Harrison [2009] NZFLR 687 that the serious injustice threshold is a high bar — discomfort or regret is not enough.
The most common successful challenges involve: agreements signed without meaningful independent advice; agreements where one party had materially more information about assets; and agreements that are being enforced decades later in circumstances the parties could never have anticipated when they signed.
Pre-Nuptial vs Mid-Relationship vs Post-Separation Agreements
The PRA does not distinguish between agreements made before, during, or after the relationship. All three are subject to the same section 21 formalities. Practically speaking, however, the timing matters.
Pre-nuptial agreements (before marriage or cohabitation) are the simplest to defend. Each party has the most negotiating freedom and there is less risk of duress or inequality of bargaining power.
Mid-relationship agreements are common where one partner inherits money or acquires a business after the relationship has begun. They can lock in the separate-property status of that new asset, but the independent advice requirement is especially important — courts scrutinise whether the partner agreeing to give something up genuinely understood what they were conceding.
Post-separation agreements use the same formalities. They are often faster than contested Family Court proceedings, but both parties still need separate legal advice before the agreement is binding.
Disclosure Obligations Before Signing
While the PRA does not contain a statutory disclosure requirement equivalent to some other jurisdictions, courts applying section 21J will consider whether material information was withheld. An agreement signed where one party had no idea the other owned a $2 million property portfolio is far more vulnerable to challenge than one signed after full financial disclosure.
Before signing, both parties should exchange:
- A list of all assets and estimated values
- A list of all liabilities
- Details of any superannuation or KiwiSaver balances
- Details of any business interests
This disclosure does not need to be filed in court — it is between the parties and their lawyers. But keeping a record of what was disclosed (and when) is important protection against a later section 21J challenge.
What a Contracting Out Agreement Cannot Do
A section 21 agreement governs property between the parties. It cannot:
- Override a court's jurisdiction to make orders protecting children under the Care of Children Act 2004
- Waive child support obligations under the Child Support Act 1991
- Bind third-party creditors
- Override testamentary promises claims under the Law Reform (Testamentary Promises) Act 1949
If your estate planning is also affected — for example, if you want to ensure your separate property passes to your children from a previous relationship — you need a will as well as a contracting out agreement.
Step-by-Step: Making a Valid Section 21 Agreement
- List all pre-relationship assets and their values with supporting documents.
- Agree on the scope with your partner — what stays separate, what is shared, what happens to jointly acquired property.
- Download and prepare a draft using a template or with lawyer assistance.
- Each party engages a separate solicitor and receives advice.
- Both parties sign in the presence of a witness; each lawyer signs their certificate.
- Keep signed originals securely — and review if circumstances change significantly.
Frequently Asked Questions
Does a contracting out agreement need to be registered anywhere?
No. A contracting out agreement under the PRA does not need to be filed with any court or government agency. It is a private contract between the parties. However, if the agreement affects a property registered on the Land Transfer Act 2017 title — for example, if it records that a property is separate — you may want to note that on the title through a caveat or similar instrument, which requires legal advice.
Can we write a contracting out agreement without lawyers?
You can draft the agreement yourselves, but it is not enforceable until both parties receive independent legal advice from separate solicitors and both lawyers attach their certificates. Skipping the lawyers does not save money — it produces a document that a court will treat as void under section 21F.
What happens to KiwiSaver in a contracting out agreement?
KiwiSaver is relationship property under the PRA to the extent contributions were made during the relationship. A contracting out agreement can address how KiwiSaver balances are treated on separation. However, KiwiSaver funds are locked in until retirement (with limited exceptions), so any agreed split is typically recorded for accounting purposes with the actual transfer deferred.
Is a contracting out agreement the same as a separation agreement?
No. A contracting out agreement sets the rules in advance — it governs how property will be divided if the relationship ends. A separation agreement is made after separation and records how the parties have actually agreed to divide assets at that point. Both use section 21 formalities, but they serve different purposes.
