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Partnership Law Act 2019

Relationship of partners to third persons and to each other - Relationship of partners to one another

38: Co-owners of land who purchase other land out of profits

You could also call this:

"Land owners who buy more land with shared profits own it together"

If you own land with other people and make money from using that land together, but the land itself isn't owned by your partnership, this law applies to you. When you use the money you've made to buy more land for the same purpose, the new land belongs to all of you in the same way as the original land. This means you own it together, not as part of your partnership.

For example, if you and your friend own a farm and make money from it, you might decide to buy another farm with that money. The new farm would belong to both of you, just like the first farm, and not to your partnership.

However, if you and the other owners agree to something different, then this law doesn't apply. You can choose to handle the new land in a different way if you all agree to it.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS206037.

Topics:
Business > Industry rulesHousing and property > Land use
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37: Partnership land, or

"How partners share and use land owned by their partnership"

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39: Property bought with partnership money, or

"Things bought with business money usually belong to the business"

Part 3Relationship of partners to third persons and to each other
Relationship of partners to one another

38Co-owners of land who purchase other land out of profits

  1. This section applies if—

  2. co-owners of an estate or interest in any land (the original property) are partners with regard to profits made by the use of the original property; and
    1. the original property is not itself partnership property; and
      1. those co-owners purchase another estate or interest in land (the second property) out of the profits to be used in a similar manner.

        1. The second property belongs to the persons referred to in subsection (1) as co-owners for the same estates and interests that are held by them in the original property at the date of the purchase (and, therefore, the second property does not belong to them as partners).

        2. This section does not apply if there is an agreement to the contrary.

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