Sorting out your finances and relationship property division after separation can feel very overwhelming—especially when legal costs start piling up. In New Zealand, if you want your property settlement to be legally binding, you need a Section 21 agreement under the Property (Relationships) Act 1976. However, many couples are shocked at how expensive the legal process can be. The good news? There’s a more affordable way to reach an agreement.
Some separated parents with non-complex cases choose not to certify their agreements or seek legal advice. They may reach an informal arrangement between themselves or through mediation and feel that formalising it is unnecessary. While this can save costs upfront, it’s important to remember that only a certified Section 21 agreement is legally binding. Without legal certification, either party could later challenge the agreement, potentially leading to disputes in the future. Be mindful, even if you have a formal s21 agreement, still the Court may set agreement aside if would cause serious injustice, which has high threshold.
A certified Section 21 agreement is legally binding, but it can still be challenged in court under certain circumstances. The court has the power to set aside or vary the agreement if:
- One party did not receive proper independent legal advice before signing.
- There was undue influence, coercion, or duress at the time of signing.
- The agreement was based on misleading or incomplete financial disclosures.
- The terms are considered seriously unfair (i.e., they cause undue hardship to one party).
- A significant change in circumstances has made the agreement unjust (although this is less common).
If both parties wish to make their agreement legally binding under Section 21 of the Property (Relationships) Act 1976 (PRA), the following legal requirements must be met:
- The agreement must be in writing and signed by both parties.
- Each party must receive independent legal advice before signing.
- Each party’s signature must be witnessed by a lawyer.
- The lawyer must certify that they have explained the effect and implications of the agreement to their client before signing.
⚠️ If the above requirements are not met, the agreement may be deemed void under Section 21F of the PRA 1976.
Breaking Down the Costs
The cost of finalizing a Section 21 agreement depends on various factors, including lawyer fees, the complexity of your assets, and whether disputes arise. Here’s what you can expect:
1. Straightforward Agreements ($1,500 – $3,000 per person)
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- If both parties agree on how to divide their assets and debts, a lawyer’s role is mainly to review and certify the agreement.
- This keeps costs relatively low, as there’s no need for lengthy negotiations.
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2. Complex Agreements or Disputes ($3,000 – $10,000+ per person)
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- If there are disagreements over property, businesses, trusts, or superannuation, legal fees quickly add up.
- Lawyers charge hourly rates ($300 – $500+ per hour), meaning the more back-and-forth negotiations, the more you’ll pay.
- The negotiation phase is the most expensive part when handled by lawyers. The longer the dispute, the higher the cost.
- If the case ends up in court, fees can skyrocket even further.
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3. Mediation First = Lower Legal Costs
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- Many couples don’t realise that negotiation is the most expensive part of the legal process.
- If you reach an agreement through mediation before involving lawyers, you can significantly reduce costs.
- Lawyers will only be needed for final review and certification, cutting legal fees dramatically.
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How to Save Money on Your Section 21 Agreement
To keep costs low, avoid lawyer-led negotiations and use mediation first. This is where FMS Family Mediation Solutions can help.
Why FMS is the Smart Choice
✅ We handle the negotiation phase—before lawyers get involved.
✅ Mediation costs significantly less than lawyer-led negotiations.
✅ Once you have an agreement, lawyers only need to review and certify it—reducing legal fees.
Let FMS Help You Do it !
At FMS Family Mediation Solutions, we guide separating couples through the property division process in a fair, confidential, and cost-effective way.
You can register ti mediate your relationship property disputes on this link : https://www.fdss.org.nz/family-mediation-services/
Disclaimer: This information is for general guidance only and does not constitute legal advice. If you need legal advice regarding a Section 21 agreement or any other legal matter, please consult a qualified lawyer.
Zayne Jouma is the Founder and Chairman of FDSS. He is a self-taught, trained, and experienced Mediator, Conflict Coach, Court Lay-Assistant (McKenzie Friend), and Community Coach. Zayne has supported many parents through mediation and conflict resolution and has assisted thousands of self-represented parents in their Family Court and High Court and Court Of Appeal cases across New Zealand. He is trained in conflict coaching, mediation, and child voice inclusion in mediation, and has extensive experience in complex cases involving resist/refuse dynamics, Family Violence, Relationship Property and Care of Children.
