The dream of co-ownership? What to consider before sharing a home

New co-ownership guidelines makes it easier to buy a home but comes with a catch It might be easy to get into this arrangement, but not as easy to get out.

TORONTO — With home ownership becoming less attainable for many Canadians living in competitive markets, such as the Greater Toronto Area, many would-be buyers are turning to each other to go in on a property together in what is often called a co-ownership arrangement.

According to the Ontario government, co-ownership is when two or more people own and live in a home together. The residents can share common areas, such as kitchens or living rooms, or they may choose to live in entirely separate units within the home.

“Co-ownership makes housing more affordable and gives people more choices, like purchasing a larger home,” the government said in a press release in early December.

In an effort to encourage more residents to consider this alternative during Ontario’s “housing crisis,” the government under Ontario Premier Doug Ford released a set of guidelines earlier this month to walk would-be buyers through the process.

The guideline includes information on the types of co-ownership, financing and insurance considerations, potential legal and regulatory requirements, as well as other matters such as upkeep and shared responsibilities in the home.

“Solving Ontario’s housing crisis is going to take new and innovative ideas,” Steve Clark, Minister of Municipal Affairs and Housing,” said in a press release.

Before Canadians hurry to find like-minded individuals to share a new home with, realtor Lesli Gaynor, who consulted on Ontario’s guidelines, said there are a few things to consider before entering into an agreement.

Firstly, Gaynor said it’s important to come up with an exit strategy so that everyone involved in the co-ownership is prepared for the possibility that one or more party may eventually want to leave and give up their share of the property.

“Getting into the co-ownership is easy, getting out is not so easy,” she told CTV’s Your Morning on Tuesday.

The real estate representative also said prospective buyers should have a plan for how they will finance their share of the home because a mortgage typically covers the entire home and not just one half or one third.

“You end up with some difficulties on how to finance that purchase of a share or property,” she said.

As the housing market continues to heat up in many regions, however, Gaynor said she thinks lenders will come up with more options for those looking to co-own a home.

“I think the big change [I’d like to see] is that people recognize it as a really valuable opportunity and option and then lenders then create a product that allows more than four people to be on a mortgage,” she said.

Gaynor said prospective buyers should also be aware of possible bylaws or zoning restrictions in the area where they want to buy a home in case their proposed living arrangement isn’t compatible with the current rules.

“We have to really look at the rules and regulations around lenders, around bylaws, around how many people unrelated can live in a house together,” she said.

While Gaynor said she believes co-ownership can be an affordable option for those looking to enter the housing market, she stressed the importance of doing the homework ahead of time.

“Be smart. Get good advice. Make sure that you see a lawyer and make sure that you have all the conversations that you need to have with the people you’re co-owning with,” she said.