Are You Purchasing Property with Others?
Here’s What You Need to Know
More and more often, young Ontarians are pooling their finances in an effort to enter the housing market. There are many advantages to structuring a purchase in this manner. By combining finances, individuals have a larger down payment, obtain financing on better terms and share the cost of ongoing maintenance obligations.
If you are purchasing a property with others, consider entering into a written Co-Ownership Agreement at the outset of the transaction. A Co-Ownership Agreement documents the parties’ intentions in purchasing and maintaining the property and sets out the legal rights and responsibilities of each party to the Agreement. When the right questions are asked, Co-Ownership Agreements successfully deal with anticipated problems in an efficient and cost-effective manner.
Some Important Considerations:
- How much equity is being provided by each party?
- What are the ownership percentages?
- Do the ownership percentages reflect each party’s contribution to the property?
- How will the parties hold title?
- Is the term of the Co-Ownership Agreement restricted to a time period?
- How will the parties pay for utilities, insurance, mortgage payments, repairs and property taxes? Will one or more of the co-owners ensure such payments are made in a timely manner?
- How will the parties anticipate and divide unexpected costs?
- What happens if one or more parties is unable to make payments for one or more months?
- Are certain rooms within the property reserved for use by only one of the co-owners?
- Is use of the property to be divided amongst the co-owners throughout the calendar year?
- How are sublets and guests controlled?
- What happens if one but not all of the parties wants to sell the property?
- What happens if one or more of the co-owners would like to terminate the arrangement?
- How will disputes be resolved?
SorbaraLAW has a breadth of experience in drafting and negotiating Co-Ownership agreements and our lawyers are available to assist you as needed. In addition to the above considerations, we will sit down with you to review your intentions and determine an ownership arrangement which mutually benefits each of the parties to the agreement.
This article was written by Slonee Malhotra, a qualified real estate lawyer with SorbaraLAW. Slonee can be reached at (519) 741-8010 ext. 258.