This section covers what you should include in a co-ownership agreement. Buying a home with other people is a big commitment  – both financially and in the ways you will live together. You will be making decisions and sharing responsibilities to care for the property.

Establishing a legal agreement between the co-owners provides clarity about the rights and obligations of co-owners and protects everyone in the case of disputes. This type of agreement is called a co-ownership agreement.

Co-ownership agreements may support your application to a financial institution for mortgage financing. To make sure that the agreement is properly prepared, you should get professional legal advice.

Ownership structure and decision-making process

Ownership can include tenants-in-common, joint tenants and ownership through a corporation. There are additional steps to set up a corporation, co-operative corporation or condominium corporation.

In the agreement, co-owners set out the decision-making process everyone will follow, which can include :

  • consensus
  • voting based on equal shares or varying percentage shares

Use of the property

This determines how indoor and outdoor common spaces are used, including designating common areas and each co-owners’ private space.

You can also include rules that address :

  • occupancy
  • use of the property by guests
  • use of property by potential new residents (for example, if a co-owner forms a new relationship)

Financial and insurance arrangements

This includes :

  • mortgage and property tax payments
  • sharing and paying operating expenses
  • funding major repairs and renovations
  • how co-owners will maintain needed insurance

Home operation and upkeep

This includes clarification of responsibilities for :

  • financial contributions
  • work and time commitments

Co-owner negligence or misconduct

This could include rules allowing co-owner(s) to seek compensation if there is negligence or misconduct by another co-owner, such as :

  • breach of the co-ownership agreement
  • misuse of money held in a common account for home operating expenses

Dispute resolution

These provisions cover alternative dispute resolution (for example, mediation or arbitration) as a way to avoid lengthy and costly court cases.

Exit/entry provisions

Clear procedures must be in place when a co-owner leaves the co-ownership arrangement and when new people enter. Rules for people entering the arrangement could include the role of other co-owners in approving a potential new co-owner.

These provisions can provide a process for :

  • new individuals or families to enter
  • how to leave the co-ownership arrangement
  • what to do in the event of the death of a co-owner
  • determining fair market value for a co-owner’s share and/or house

This also includes rules about what to do about an existing co-owner’s share of the house. For example, the share may be purchased by remaining co-owners or a third party, or you may want to sell the house and end the co-ownership arrangement.