You might be wondering why some legal documents are called “Agreements” while others are called “Deeds” — and which you should be using for your property-related transaction. The distinction is not just semantic: a document that should be a deed but is executed as a simple agreement (or vice versa) can be ineffective, unenforceable, or expose you to unintended liability.
This article clarifies the specific applications, implications, and legal distinctions between deeds and agreements in the context of New Zealand real estate transactions. Whether you are buying, selling, leasing, or developing property, understanding these differences is essential for ensuring your transactions are not only effective but also legally binding.
Who needs to know this
This article is for:
- Property buyers and sellers who encounter both agreement-type and deed-type documents in a transaction
- Business owners dealing with commercial leases, assignments, or variations
- Anyone transferring property into a trust or between family members without a traditional sale
- Landlords and tenants negotiating lease variations, surrenders, or assignments
What is a property agreement?
In the context of New Zealand property, an agreement (also referred to as a “contract”) is a legally binding arrangement between two or more parties involving a mutual exchange of value.
For an agreement to be enforceable, three core elements must be present:
- Offer and acceptance — one party makes an offer on clear terms, and the other accepts it without qualification.
- Intention to be legally bound — both parties must intend the arrangement to create legal obligations, not merely a social or moral commitment.
- Consideration — the promise or obligation must be part of a bargain. Something of value is given in return for the promise, typically money or a counter-promise.
An agreement for the sale and purchase of property also needs sufficient certainty as to the parties, the property, the price, and any conditions or obligations.
Must property agreements be in writing?
As a general rule of contract law, agreements can be oral or written. However, under section 25 of the Property Law Act 2007, if someone is selling or otherwise disposing of land, the agreement is not enforceable unless it is:
- In writing; and
- Signed by both the vendor and the purchaser (or their authorised agents).
This means a verbal handshake deal to sell land has no legal force in New Zealand, regardless of how genuine both parties’ intentions were.
The most common form of property agreement is the ADLS/REINZ Agreement for Sale and Purchase of Real Estate, which is the standard-form contract used in the vast majority of residential and commercial transactions in New Zealand.
Section 25 of the Property Law Act 2007 is clear: a verbal agreement to sell land is not enforceable. Get it in writing, signed by both parties, before you rely on it.
What is a property deed?
A deed is a legal document containing a binding promise or commitment — most often used when passing or confirming an interest, right, or property. Historically, deeds were “documents under seal” (literally sealed with wax), and while the wax seal is no longer required, the formal execution requirements remain.
Under section 9 of the Property Law Act 2007, a deed must be:
- In writing
- Signed by the party being bound by it
- Witnessed — the signing party’s signature must be witnessed by someone present at the time of signing
- Delivered to the other party — this can be done electronically in modern practice
If a deed does not comply with all of these requirements, it may be entirely ineffective — it will not create, vary, or extinguish any legal rights. Courts have struck down purported deeds that lacked a witness, were signed under duress, or were never formally delivered.
Why do deeds not require consideration?
The requirement for consideration in agreements versus deeds is the single most important practical distinction between the two instruments. The formality of executing a deed — the writing, signature, witnessing, and delivery — substitutes for consideration. The act of proper execution signals a serious, deliberate commitment that the law will enforce without the need for a bargained exchange.
This matters enormously when you want to confer a benefit or impose an obligation without a payment or counter-promise — for example, gifting property, granting a perpetual right, or documenting a settlement of a dispute where one party concedes everything.
Common types of property-related deeds
| Deed type | When used | Key feature |
|---|---|---|
| Deed of lease | Granting a commercial or residential tenancy | Creates ongoing obligations; survives assignment to new owner |
| Deed of assignment | Transferring a lease or contract to a new party | Binds the assignee to the original terms |
| Deed of variation | Changing the terms of an existing deed or lease | Must meet same formal requirements as the original deed |
| Deed of surrender | Ending a lease before its expiry by agreement | Releases both parties from ongoing obligations |
| Deed of termination | Ending any deed-based arrangement | Similar to surrender but broader application |
| Deed of acknowledgement of debt | Formalising a loan or debt between parties | Enforceable without consideration — useful for family loans |
| Deed of covenant | Binding successors in title to ongoing obligations (e.g. maintenance, land use) | Can run with the land and bind future owners |
Key differences between deeds and agreements
| Feature | Agreement | Deed |
|---|---|---|
| Consideration required? | Yes — must be present | No — execution is sufficient |
| Must be in writing? | Yes, for land dispositions (s 25 PLA 2007) | Yes, always |
| Signature required? | Yes, for land dispositions | Yes, always |
| Witness required? | No (but advisable) | Yes — mandatory |
| Delivery required? | Not formally | Yes |
| Can create perpetual obligations? | Typically conditional on continued performance | Yes — can be indefinite |
| Limitation period (time to sue) | 6 years (Limitation Act 2010) | Generally also 6 years in NZ |
When to use a deed instead of an agreement
1. Transferring property without a sale
If you are gifting property to a family member, transferring it into a trust, or moving it between related companies without a market-value purchase, there is no “consideration” in the traditional sense. Using an agreement would leave the transaction on uncertain legal footing. A properly executed deed is the correct instrument.
2. Settling a dispute without mutual concession
Settlement deeds can resolve disputes where one party is making concessions but there is no clear consideration flowing the other way. Without a deed, that settlement might be unenforceable as an agreement.
3. Creating obligations intended to bind future owners
Certain covenants — particularly land use restrictions, maintenance obligations, and access rights — need to be in deed form to have any prospect of binding successors in title. The Property Law Act 2007 governs when obligations will “run with the land” to bind future buyers.
4. Lease documents
Commercial leases are invariably executed as deeds. This is because the obligations created — rent payments, outgoings, repair and maintenance, make-good — are intended to be binding and enforceable for the full term of the lease regardless of whether any ongoing “consideration” flows.
What happens if you get it wrong?
Using an agreement where a deed was required
If you use an agreement to document a transaction that legally requires a deed — for example, purporting to transfer property without consideration through a simple agreement — the transaction may be void or voidable. The intended transfer does not occur, and the parties may find themselves in a dispute about what, if anything, was legally intended.
A deed that is not properly executed
A deed that fails the formal requirements in section 9 of the Property Law Act 2007 may be entirely ineffective. A witnessing irregularity, a failure to deliver, or a signature obtained under duress can all render a purported deed of no legal effect. Given that deeds are often used for high-value transactions (leases, transfers, assignments), the consequences of a defective deed can be severe.
Worked example
Practical tips for property transactions
Before signing any property document
0/0 completeEnsuring legal precision in property transactions
Understanding whether a deed or an agreement should be used is essential for avoiding legal headaches down the line. Despite the general rules set out in this article, the answer to any particular problem will depend on the specific facts of your transaction, the nature of the interest being dealt with, and the parties’ objectives.
If you need specialist advice from property experts, get in touch with the team at NZ Legal.
This article provides general information about agreements and deeds under New Zealand property law as at May 2026. It is not legal advice. Speak to a property lawyer about your specific situation.
Sources
- Property Law Act 2007Sections 9 and 25 govern the formal requirements for deeds and written agreements for the disposition of land.
- Contract and Commercial Law Act 2017Consolidates the general law of contract in New Zealand, including offer, acceptance, and consideration.
- ADLS/REINZ Agreement for Sale and Purchase of Real EstateThe standard-form agreement used in the vast majority of NZ residential and commercial property transactions.
Was this article useful?
Thanks for the feedback. It helps us improve.
