Shawna Fletcher

In the wild west known as the Toronto Real Estate market, where people are struggling to afford homes, a newer trend that is emerging is the idea of co-owning a home. Co-ownership allows buyers to combine down payments, leverage multiple incomes, and split mortgage and household expenses. There are many forms this sort of ownership can take, but the two most common would be shared communal living or carving out separate spaces under one roof.
The co-ownership housing alternative is being promoted not only as an option that is affordable, but also as a way of fostering a sense of community, and as an antidote to loneliness. 
Last year 24% of millennials who purchased property did so in a communal arrangement. At the other end of the spectrum seniors are buying with younger family members, or turning their current homes into co-living situations. It is estimated that there are over 5 million spare bedrooms in households whose owners are 65 and over.
But co-ownership has its complications. With multiple buyers, decision making about buying or not buying can take longer, and in the fast moving Toronto market, houses are not sitting around waiting. Some potential co-owners are coming up against zoning issues when they want to add a second kitchen to carve out separate living spaces. Banks, always slow to respond to change, are sometimes saying no to multiple borrowers under one mortgage; neither do they recognize a split ownership under one mortgage. If the trend continues, and I suspect it will, banks will likely start to come up with some options for co-owner buyers, but it will take time.
Once people have fought through the red tape at the bank, there are the logistics of actually making a co-ownership situation work. There should absolutely be a legal contract drawn up between all parties covering issues such as the division of the ownership of the property and how much each person pays for utilities and repairs. It is recommended that owners hold regular meetings and have a voting system for making decisions, and a plan for when there is a tie or a major disagreement. It is further recommended that there be a common fund with at least three months’ mortgage and expenses in it, in case one member can’t pay. Since banks do not recognize the ownership split in this sort of arrangement, the other members of the group are then on the hook to pay.These issues just scrape the surface of what an agreement might cover, and each situation likely has its own particulars as well.
There are two types of ownership structure that co-ownership can take. the first is joint ownership: this is where each owner has an equal share and there is a right of survivorship. This means that if one owner dies, the other owners inherit their shares, no matter what might be written in their wills.  The second option is tenants in common. This arrangement allows for unequal shares in a property and does not have the right of survivorship, so shares can be left to someone else in a will. 
One of the biggest questions is how does it all end? Many people put a timeline on their agreement, with the property being sold at the end of that period, with one owner buying out others, or just with a review of everyone’s perspective on how things are going. But life is unpredictable. What happens if someone’s situation changes and that person needs to leave early? Selling a portion of a house is not something we are used to seeing on the MLS, so plans should be in place.
The real nod to the growing popularity of co-ownership, as I see it, is the set of guidelines the Ford government put out at the end of December entitled More Homes: More Choices, where co-ownership is touted as one solution to Toronto's systemic housing crisis. I suspect I am not alone in noting the irony of a capitalist political figure endorsing this socialist concept!
Co-ownership definitely has its advantages, but as with any other real estate deal, especially one of the more unusual ones, the doctrine of caveat emptor is an excellent one to follow.

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