Creating a Co-Ownership Agreement

Creating a Co-Ownership Agreement

A Co-ownership arrangement can make buying a home a reality. However, there are some things you and your potential co-owners should agree upon first to make sure everyone knows what they are responsible for to avoid any conflicts down the road. We recommend that these things should be covered in a co-ownership agreement, a legal document that helps establish guidelines and protect the investment of all parties involved. This document can be drafted with the help of an attorney. Here are some of the things you’ll need to consider:

  1. All co-owners should agree on what percentage of the equity each of you owns to avoid confusion regarding who gets what and profits if/when you sell.
  2. Think about maintenance, repairs, renovations, taxes, utilities and insurance. Agreeing who is responsible for what expenses is a must.
  3. Establish how many of the co-owners will be living in your new home. One, two, or everyone on the mortgage?
  4. Decide what to do if one of the co-owners doesn’t pay what he/she has agreed to, helping ensure you’re prepared.
  5. Joint Chequing and Savings Accounts are a good idea to handle mortgage payments, expenses and unexpected costs like a new roof, flood repairs and other emergency expenditures. (e.g. DUCA no fee Chequing and DUCA High interest Savings accounts)
  6. If one or more co-mortgage holders decide to sell his/her share, you need to agree on how the equity accumulated on the house will be distributed.
  7. If one or more co-owners want to sell, figure out how that will work. You’ll also need to decide if the other owners can purchase the property, how its value will be determined, and what you’ll do if there’s an agreement.
  8. What happens when your mortgage comes up for renewal? This is the time to review your agreement to make sure everyone’s still on the same page.

DUCA’s experienced Mortgage Specialists provide the right advice and the right mortgage options for co-ownership arrangements, we can help connect you with attorneys in your local community who can help guide you through the co-ownership arrangement process.