Co-Ownership in Today’s Housing Market

Co-Ownership in Today’s Housing Market

According to The REALTORS Association of Hamilton-Burlington 2019 year end statistics, the average price of a residential property was up 4.9% from 2018, and 95.3% higher from 10 years ago.

As housing costs rise, people may find themselves priced out of the market, many first time buyers may have difficulty saving the minimum 5% downpayment and seniors may have difficulties qualifying for a mortgage.

Because of this, more people are considering other ways to achieve their home-buying goals, one such option is co-owning with friends or family.

Co-ownership housing is shared living arrangements, where two or more people purchase and live together in the home. Co-owners may share common living areas like kitchens and living rooms, or the home may be divided into separate units – like a home with an in-law suite or perhaps a legal duplex.

Responsibilities for care and upkeep of the home are generally shared between the owners. The property can be purchased equally between the parties – or depending on the living arrangements, one party may put more towards the downpayment and upkeep costs.

Co-ownership housing increases the options available to home buyers. If you were able to purchase a home for $350,000.00 and you decided to co-own with family or friends that were qualified for the same amount, by pooling your resources you would open up more possibilities on the market.

There are different ways to co-own a home, you can do it as individuals or by setting up a corporation. These options are best discussed with your lawyer, who can also prepare contracts and/or agreements required on your behalf.

Below, I’ve included some examples of co-ownership from the Government of Ontario’s Co-ownership Guide. These examples show how co-ownership can be beneficial in the right situation:

Example 1: Build a Caring Community

A group of seniors want to age in a caring community rather than live alone. They use the savings or profit from the sale of their homes to purchase a home together. They renovate the house to include accessible features. The house includes a shared kitchen and living room, and together, the residents buy and prepare food, as well as arrange cleaning services. The group also decides to create some private amenities, including an ensuite bathroom for each bedroom.

Example 2: Access to Homeownership

A group of young adults buy a house in a community of single detached homes. By pooling their resources, they can make a 20% down payment on the house allowing them to avoid mortgage insurance. The co-owners contributed different amounts towards the purchase price, so the percentage of the house each owns varies. This co-ownership arrangement will allow each person to build equity and eventually buy houses of their own.

If major renovations are made to the house, the costs will be split based on the percentage of ownership. Ongoing operating costs are shared equally, as are basic responsibilities for the care and upkeep of the house.

Example 3: Meet the needs of Two Families

Two families with children want to live in a neighbourhood where they can’t afford to buy a house of their own. They decide to buy a house together that will have private units for each family and a shared yard for the children to play in. Sharing babysitting and having potential friends for their children while living in the same house are further advantages to co-ownership. Their plan is to co-own the house for about five years or until they are both able to buy their own houses.

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If co-ownership is something that may work for you and your situation, let me help you find your perfect home and guide you through the process.

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