General-information disclaimer: This article provides general information about Ontario law and is not legal advice. Legal outcomes depend on the specific facts. Obtain advice about your own situation.
Buying property with a spouse, partner, parent, child, sibling or friend can make ownership more affordable. It can also create long-term legal and financial ties that deserve the same planning as any other major partnership.
The deed answers who owns the land, but co-owners should also consider how they will pay for it, use it, sell it and deal with death or disagreement.
A realistic scenario: what can go wrong without advance legal planning
The following is a fictional/composite scenario created for education.
Two friends buy an investment property together. One contributes most of the down payment, but title is registered equally and there is no co-ownership agreement. Three years later one wants to sell while the other wants to keep the property. They also disagree about whether the larger initial contribution should be repaid first.
What you should know
1. How title is held
Ontario co-owners may hold title in different ways, including forms with different survivorship consequences. The right choice depends on the relationship and estate plan.
2. Unequal contributions
If down payments, mortgage payments or renovation costs are unequal, the parties should decide whether ownership percentages or repayment rights reflect those differences.
3. Use and expenses
A co-ownership agreement can address who occupies the property, how carrying costs are shared and how major repairs are approved.
4. Borrowing
Mortgage lenders may require all owners to sign and may impose joint obligations. Owners should understand the financing structure.
5. Exit
A plan can address sale requests, valuation, buyouts and what happens if one owner stops paying.
6. Estate planning
Title and the owners’ wills should be reviewed together so the intended result on death is actually achieved.
Practical checklist
- Discuss ownership percentages before closing.
- Document unequal contributions.
- Decide how expenses and repairs will be approved.
- Create an exit or buyout process.
- Coordinate title with each owner’s estate plan.
The practical lesson
Co-owning property can work very well. The mistake is assuming friendship or family connection makes documentation unnecessary.
Get help before the issue becomes urgent
Thomas, Efraim LLP can review ownership structure, purchase documentation and related estate-planning issues. Ask about a free real estate offer review or free 30-minute consultation.
