Buying a home is one of the largest financial commitments most people will make. Yet many purchasers do not speak with a real estate lawyer until shortly before closing.
By that point, important decisions have often already been made.
Buying a Home With Someone Else? Put Your Agreement in Writing
Buying a property with a partner, family member, friend, or business associate can make homeownership more accessible. But co-owning real estate can also create legal and financial complications if the relationship changes.
Before purchasing together, it is important to consider not only how you will buy the property, but also what happens if things do not go according to plan.
Who Owns What?
When multiple people purchase a property, the ownership structure matters.
Co-owners should understand how the property will be held and what that means for their respective interests. They should also discuss how costs such as mortgage payments, renovations, maintenance, insurance and property taxes will be divided.
What If One Person Wants to Sell?
This is one of the most important questions to answer before purchasing.
What happens if one co-owner wants to move out? What if someone loses their job and can no longer afford the mortgage? What if the relationship between the owners breaks down?
A written co-ownership agreement can establish expectations for situations such as:
- Selling the property
- Buying out another owner
- Dividing expenses
- Major renovations
- Mortgage payments
- Repairs and maintenance
- Disagreements between owners
- What happens if an owner dies
Having these conversations at the beginning may feel uncomfortable, but avoiding them can create much greater problems later.
Don’t Assume a Handshake Is Enough
A property purchase involves substantial money and long-term obligations. Even where co-owners have a close personal relationship, their expectations about the property may differ.
A carefully prepared agreement can help reduce uncertainty and provide a process for resolving disagreements.
If you are considering buying a home or investment property with another person in Ottawa, speak with a real estate lawyer before you commit. Contact our office to discuss your proposed purchase and whether a co-ownership agreement is right for you.
The content on this post is for information purposes only and is not legal advice, which cannot be given without knowing the facts of a specific situation. You should never disregard professional legal advice or delay in seeking legal advice because of something you have read on this website. The use of the website does not establish a solicitor and client relationship.