Co-Ownership Agreement Checklist: What to Write Down Before You Buy.
What a Canadian co-ownership agreement should cover before friends, siblings, or a parent and child buy one home: shares, deposits, monthly costs, repairs, exit, death or breakup, and disputes. Not a template.
Co-buying is two decisions at once. The lender decides whether the household can carry one mortgage. Title decides who owns the house. A co-ownership agreement is the third document: the deal among you. The head-term page is Co-buying a home in Canada. The chapter on friends and family is buying with a friend, partner, or family.
This page is a checklist of topics. It is not a form you can sign, and it is not legal advice. Provinces do not use one national co-ownership statute you can paste into a PDF. Take the list to a lawyer before you waive conditions.
Ownership shares
Start with who owns what. Joint tenancy is equal shares and a right of survivorship. Tenants in common can be unequal, and a share passes by will. If one of you paid more of the down payment, equal joint tenancy will not remember that. Write the percentage next to each name, and say whether it matches the cash each person put in or some other split you actually agreed.
Also write what the share controls. Does a 70 percent owner get 70 percent of every decision, or only 70 percent of the sale proceeds? Those are different rules. The mortgage does not record them. If you want tenants in common, say so in the agreement and tell the lawyer who registers title. Signing an agreement that says 60/40 while the deed says joint tenancy is how people end up in a fight about which paper wins.
Money in
Down payments are rarely equal, and deposits move before closing. Record:
- How much each person paid toward the deposit and the rest of the down payment
- Whose account the deposit left, and who is entitled to it if the deal dies
- Whether a larger contribution is a loan to the other buyer, a gift, or a bigger ownership share
- Gift letters the lender asked for, and that a family gift is not the same thing as a share
Unequal deposits are the most common reason friends think they are “50/50” when the money was not. If the extra cash is a loan, write the repayment, whether it charges interest, and whether it is paid back before anyone splits sale proceeds. If it buys a larger share, the percentage should say that. Do not leave it as a text message.
The lender will also ask where the down payment came from. Keep the records the down payment article points at, including registered withdrawals. Each eligible buyer uses their own FHSA and their own Home Buyers’ Plan. The agreement should say whose withdrawal paid which part of the down payment so you can trace it later. Stacking rules are in only one of you is a first-time buyer?.
Money every month
One mortgage payment does not tell you who owes what inside the house. List the monthly costs and the split:
- Mortgage payment
- Property tax
- Home insurance
- Utilities
- Condo fees, if any
- A reserve for the bills that are not monthly
Say whether you split by ownership share or by some other rule, such as the person who lives there paying the utilities. “We will figure it out” is not a split. Also name the account the payment leaves. A joint mortgage can be paid by one person without removing anyone from the note. If one of you covers the other’s month, write whether that creates a debt.
If someone will be away for months, say whether their share continues. A parent who co-signs but does not live there is not automatically responsible for utilities. The co-buying chapter separates co-borrower, co-signer, and guarantor. Match the agreement to the role you actually chose.
Repairs and upgrades
Roofs and paint are different decisions. Set a threshold. Under it, either owner can call a tradesperson and get paid back on the agreed split. Over it, you need the approval rule you wrote down, whether that is everyone or a majority of shares. Do not copy a dollar figure from another family’s deal. Pick the number that would hurt if someone spent it alone.
Improvements change value. Say whether a renovation increases someone’s share or is just a cost you split. If one person pays for a kitchen and you later sell, do they get that money back first, or does it fall into the same percentages as the rest of the equity? Silence is what courts and families argue about. Also say who may book the work and who holds the warranty.
Exit
Someone will want out, or need out. The agreement should answer it before you are angry. Cover:
- How much notice a departing owner must give
- Whether the others have a right to buy the share before it is offered to a stranger
- How you value the home: one appraisal, two appraisals and an average, or another method you name
- How long the others have to complete the buyout
- What happens if nobody can buy the share: listing the whole home
- How sale costs and the remaining mortgage are paid before anyone sees cash
A buyout is not a private IOU. The lender has to approve the person who keeps the mortgage, and a lawyer has to change title. The worked example, with the assumptions labelled as an example, is buying out a co-owner. Put the valuation method in the agreement so you are not negotiating the formula on the day someone moves out.
Forced sale is the backstop. If the others cannot or will not buy, the agreement should say who may list, at what kind of price, and how you choose the agent. Without that, one owner can be stuck on a mortgage they no longer live with.
Death or breakup
Joint tenancy already sends a share to the survivor. Tenants in common do not. If you chose tenants in common so a share can pass by will, each of you needs a will that matches the agreement. The agreement can also give the surviving owners a right to buy the estate’s share, using the same valuation method as any other exit. Say whether life insurance is required, who pays it, and who is named. Do not invent a tax result. A death can have tax consequences this page does not calculate. Ask the lawyer and, if you need it, an accountant.
A breakup is not the same as a death, and it is not the same in every province. Married spouses and common-law partners can have family-property rules that override a casual note. This checklist does not state those rules. If you are partners, say so to the lawyer and ask which statute applies where you live. Friends and siblings still need the exit section. A relationship status does not fill it in for you.
If one of you stops living in the home, say whether they can move back, whether a partner who is not an owner may live there, and whether the house can be rented. Rent is a new agreement with a tenant, and it may also matter to the lender if you promised to occupy the home.
Disputes
Pick a path that is shorter than a lawsuit as the first step: a named mediator, or a requirement to meet with the lawyer who holds the agreement. Then say what happens if that fails. Name the province whose law applies, especially if you do not all live in the same place. Say who may sign a cheque from the joint account if you disagree. Deadlock on a repair over the threshold should fall through to the exit section, not sit there for a year while the roof leaks.
Also write what is not a dispute: a late share of the mortgage. Give it a cure period, then a consequence you are willing to live with, such as the right to pay it and treat it as a debt against that person’s sale proceeds. The lender will not wait for your cure period. Their remedies sit in the mortgage, not in this agreement.
What the agreement does not do
It does not qualify you for the mortgage. It does not change FHSA or HBP eligibility. It does not remove a name from title. It does not replace a will. It does not set land transfer tax. Those live in the lender’s commitment, the tax rules already explained on the FHSA and HBP pages, and the land-transfer calculator.
Use the list below as the agenda for the meeting. Check items off when the signed agreement actually covers them, not when you have talked about them.
When the draft is back, read it against this list with your own lawyer. Then qualify the mortgage as one household on the affordability calculator before you rely on a payment you have not stress-tested.