I came across a "food for thought" type of article today from rew.ca on the (sometimes) challenging thought of owning your own home and found that some are considering co-ownership.
This may, or may not, be an alternative for you. Here's more:
Jeremy Wilson, 38, was frustrated with paying high strata fees and wanted a bigger back yard for his dog.
When he and his wife, Kim, started looking at single family homes, their frustration only grew.
“I work in Kitsilano and my wife in Richmond and we really wanted to stay in Richmond. However, what we could afford and what we wanted were miles apart,” says Wilson. “In our price range, the homes were either really small bungalows or in complete disrepair.”
The couple came up with an idea that is growing in popularity in cities across BC — co-ownership, whether it’s one or more roommates, co-workers, friends or family members buying and sharing a home together and splitting the expenses.
The couple approached Kim’s mother and asked if she wanted to purchase a home together. At the time, Kim’s mother, Jean, also owned a townhome and was fighting cancer. It seemed to be a win/win situation.
“We knew we could all live under the same roof and it gave Kim peace of mind that her mother was nearby,” says Wilson.
They ended up buying a 2,500-square-foot home in Steveston for nearly $900,000.
“We never could have bought this house on our own,” he says, adding Kim’s mother passed away and her half-share of the home was divided between Kim and her sister (who now lives in the lower part of the family home. “We split the expenses three ways and we’ve never had a problem.”
Here are some reasons why it may not be a good fit for you:
Randy Klarenbach, real estate lawyer at Richards Buell Sutton LLP, strongly cautions his clients against these types of arrangements.
“What happens if one owner loses their job or gets sick and can’t work, or moves out of town?” says Klarenbach. “A lender can’t foreclose on half a property.”
Or, he went on to say, one party simply can’t pay? It becomes the other person’s responsibility to make the mortgage payments or risk losing the house.
“Bottom line, it’s a huge financial risk,” he says, adding he’s seen co-ownership agreements as long as 500 pages, covering every conceivable eventuality.
“Even though some of these arrangements do work well, it is my job to think of everything that can go wrong and let my clients know.”
Colin Lawrence concedes that, as with any financial arrangement, there are drawbacks.
But if all parties come in with eyes wide open, with a workable plan, with expectations drawn up and good legal advice, co-ownership can work well.
“Everyone must be aware of all of the things that can go wrong and that’s why we provide our members with an agreement checklist,” adds Lawrence.
It’s been five years since Wilson entered into a co-ownership agreement and “it’s been fantastic … the only drawback is the lack of privacy.”
Please click here for the full article on rew.ca for all the pertinent information surrounding co-ownership.
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