High home prices and mortgage rates, declining inventory, and bidding wars, are leaving few options for eager potential home buyers. 

Affordability is so low that six in ten (63 per cent) of Canadians think owning a home is completely out of reach according to an Ipsos study.

One innovative solution gaining popularity is co-ownership housing. 

Here, home buyers pool their resources with family, friends, acquaintances and even strangers to buy a first home or trade up to a larger home.

Benefits include:

• buying a home (often years sooner) compared to buying alone;
• buying a larger home in a better neighbourhood. Together co-owners have a larger downpayment;
• not having to pay mortgage insurance if the downpayment is 20 per cent or more;
• making larger mortgage payments to build equity faster; 
• sharing the costs of maintenance and expenses; and
• maximizing the potential of a larger property.

Buying a home with others is a major undertaking and it’s important to understand the risks, according to Amy Lowe, a partner at Synergy Business Lawyers LLP and former Vancouver-area Realtor. 

“If your clients are thinking of co-ownership, it’s important for them to start discussing agreements as early as possible,” said Lowe. “Once you’ve found a place and found people you want to purchase with, the property itself will dictate some of the clauses in the agreement.”

According to Lowe, potential co-owners may be considering buying a home: 

• to renovate into two or more separate, private units;
• with an existing secondary suite or laneway home; or
• with private and shared living spaces such as kitchens, living rooms, and yards.

Once potential co-owners agree to buy a home together, they should consider getting a pre-approved mortgage and make sure an offer to purchase is subject to financing (if the co-owners require a mortgage to complete the transaction), according to Lowe.

Financial institutions now offer these types of mortgages, for example, Vancity’s Mixer Mortgage™ and BMO’s Customizable Mortgage Solution. 

Lowe explains that a lender will:

• review each co-owner's finances including monthly bank statements, tax returns, credit card statements and expenses; 
• provide information on the type of mortgage available such as a fixed or variable rate; and
• provide information on terms such as one, five and ten-year terms. 

Generally, lenders will require co-owners to sign the mortgage jointly and all co-owners are liable for the full mortgage loan, not just their share of the loan. 

“Co-owners should be aware that signing a mortgage with co-owners can affect their ability to get other loans, for example, a vehicle loan,” Lowe said.

If a co-owner decides to move, the remaining co-owners will usually be required to refinance, which includes being re-qualified for the mortgage loan. Typically, the lender will discharge the existing mortgage and register the new mortgage with the new co-owners, according to Lowe. 

If the existing owners don’t meet lender requirements, the party leaving may have to stay part of the mortgage contract even if they move and will be liable for mortgage payments.

A legal co-ownership agreement between the co-owners will clarify the rights and obligations of all parties, according to Lowe.

Co-owners can decide whether they want to co-own as a group of individuals or as a corporation (which can take different forms).

Co-owners can:

• have equal ownership shares of the property and equal decision-making power; or 
• agree to different levels of shares and decision-making power, for example, one co-owner has a 70% downpayment and lives in a larger unit, while another co-owner has a 30% downpayment and lives in a secondary suite or smaller laneway home. 

Co-owners can own as:

• Tenants in common: here two or more owners hold separate shares of the property, for example, each have 50/50% ownership, or one co-owner has 70% and the other 30%. This is typically used by non-family who share the mortgage and title. If one owner dies, their share can become part of their estate, passed on to a beneficiary or can be sold to the remaining co-owners. 
• Joint tenants: here two or more owners own an equal non-divisible share of a property. This is typically used by spouses, partners, and family. The fundamental benefit of joint tenancy is the right of survivorship. This means that if one owner dies, the property’s interest can be transferred to the remaining owner(s) on the title, without the need to apply for probate. 

In the co-ownership agreement, co-owners also set out the decision-making process they’ll follow, for example whether it’s by consensus or based on equal shares or varying percentage shares. 

In the co-ownership agreement, co-owners can decide on:

• the use of the property, designating common spaces such as yards, gardens, play areas and equipment, pools, hot tubs, gyms, how common spaces are used; and
• how guests and new residents are treated – for example, if a single co-owner has a new partner or gets married.

The co-ownership agreement can also provide details including what happens when a co-owner:

• loses their job and can’t pay their share of the mortgage or expenses;
• doesn’t pay mortgage payments or expenses;
• decides to rent their share of the property; or 
• decides to sell – and whether other co-owners have the right of first refusal.

The co-ownership agreement can also detail who pays and how much for: 

• the real estate commission or fees;
• mortgage and property taxes, insurance;
• operating expenses such as utilities - water, gas, internet, cable;
• maintenance and repairs - to the roof, heating and ventilation; painting, fence building, deck maintenance; 
• household items such as light bulbs, hardware and tools, lawn mowers, weed eaters, gardening equipment; 
• cleaning – or a cleaning schedule; and
• dispute resolution – including mediation or arbitration.

There are also a range of government benefits and incentives that co-owners can consider applying for, such as government first-time home buyer rebates and programs: 

• CMHC’s First-time Home Buyers’ Incentive;
• The Home Buyers’ Plan (RRSPs for downpayment); 
• GST/HST New Housing Rebate;
• First-Time Home Buyers’ Tax Credit (HBTC);
• CMHC Mortgage Loan Insurance Premium Refund; 
• BC Property Transfer Tax (PTT) First-Time Home Buyers’ Program; and
• BC Property Transfer Tax Newly Built Home Exemption.

A lawyer can also provide information on adhering to building codes and zoning bylaws.

An April 2023 Ipsos poll found 51 per cent of Canadians would consider co-ownership with family or friends in order to buy a home. An August 2023 Royal LePage survey found 76 per cent of co-owners cite a lack of housing affordability as a major motivator for choosing co-ownership. 

This isn’t surprising given that 15.3 per cent of first-time buyers and 9.3 per cent of repeat buyers in BC are purchasing properties in groups of three or more, according to Statistics Canada.

There are local Realtors specializing in co-ownership, including Noam Dolgin of Heller Murch Realty in Vancouver. 

A licensed Realtor since 2013, Dolgin began actively working in the area of co-ownership seven years ago, putting his background in community development, environmental education, and greening to good use. 

Co-ownership, according to Dolgin, offers better housing for cheaper and a pathway to more effectively use existing housing stock. Co-ownership appeals to buyers looking for affordability, community, and sustainability. 

To help clients, Dolgin co-founded, with lawyer Richard Bell, the website Collaborative Home Ownership BC, and:

• hosts information events; 
• provides matchmaking services (to strangers);
• offers co-ownership classifieds for potential co-owners; and
• provides resources to groups looking to buy together. 

Traffic to the website has grown exponentially in the last few years as prices increased, and during COVID lockdowns as social isolation became a huge issue. 

Dolgin’s clients are all ages and range from singles and young families to parents with adult children and intergenerational families to seniors wanting to age in place. Some are current roommates or friends, others are family members, and some are total strangers. 

Dolgin has 2,000 potential buyers on his mailing list and a few hundred in his matchmaking database. 

The majority of clients are in Metro Vancouver, in Victoria, and on Vancouver Island in the Cowichan and Comox areas. Other clients are in Kamloops, Dawson Creek and across the province. The commonality is clients aren’t just looking for affordability. They value community and sustainability. 

Clients are buying larger homes that can be renovated to accommodate two families with three bedrooms each, and homes with laneway houses. 

Example: In Victoria, Noam Dolgin successfully matched two sisters and their friend - all in their 70s - with a single 30-something woman. The siblings live upstairs with their friend, while the young woman lives in the group level suite. By all accounts this arrangement is working well.

We’d like to know. Contact Harriet Permut, director of government relations at hpermut@rebgv.org.

If you or your clients have questions about co-ownership, we strongly urge you to get legal advice.