Toronto Co-Ownership Guide

Co-Ownership is an area of Real Estate that very few people know about. Its historical definition is expanding as buyers find new ways to enter the market. We hope our Toronto Co-Ownership Guide helps with an often misunderstood topic in Real Estate in the city.

What Is Co-Ownership?

The concept of co-ownership has been around since the beginning of time. It’s not a new idea. Legally speaking it means two or more people being on title to and having ownership of the Real Estate. From a cultural point of view the idea is gaining more traction as real estate prices in Toronto continue to climb. Entrants to the market are exploring non traditional methods to gain access. Co-ownership is different from Co-op and Condominium ownership.

A History of Co-Ownership Building Apartments In Toronto.

The common perception of Co-ownership in Toronto started as a way for developers to get around restrictions on the conversion of rental buildings to Condominiums. Co-ownership is sort of in the middle. There are about 50 buildings in Toronto that fit the description. The exclusive nature of these buildings (many are now in highly desirable areas) means that deeds are often negotiated off market. They remain a hidden gem.

How To Finance A Co-Ownership Apartment Purchase.

The non traditional nature of these buildings and the small niche they occupy means banks are very reluctant to offer mortgage solutions. That’s not to say that financing is impossible. There are a number of Credit Unions and other similar lenders who are very happy to arrange financing for the purchase of a co-ownership apartment. As of 2016 the minimum downpayment is 20%. Also, the CMHC does not insure mortgages for co-ownership properties. The theory is that as a Government of Canada institution they don’t want to underwrite the removal of affordable rental units from the market. This is fair enough in many regards. Purchasing a Co-Ownership Apartment in Toronto remains a very sound investment.

What Are The Pros To Co-Ownership Buildings?

Apartments in Co-Ownership buildings are generally cheaper than comparable properties in the areas they are located. Because the bulk of the buildings now available as co-ownership apartments were built in the 1950s they are often in mature, sought after areas. Co-ownership buildings are well maintained and are considered desirable.

What Are The Cons To Co-Ownership?

There are some down sides to this form of Real Estate. Financing is one of them. We mentioned this earlier. Mitigating risk is another. For example, who is responsible if one owner is in arrears with a commonly held mortgage on a commonly held deed? Everyone on title is. Disposing of or selling your title share can be bound by restrictions depending on any agreements in place with the other owners.  These restrictions though are often not as stringent as those found in Condominium Apartment transactions. We recommend having a lawyer look through every line of any agreement to make sure your interests are protected.

How Do I Find Co-Ownership Apartments For Sale?

Because of the generally exclusive nature of these transactions it’s good practice to find a Realtor to help you. We have done a number of these types of transactions through the years.

Is Co-Ownership In Toronto Becoming More Popular?

In its broadest sense co-ownership is encountered every day. Two or more people have their names on title, have an interest in the Real Estate and contribute to the upkeep of a building. It doesn’t end there though. Co-Ownership can take many forms. Two siblings buying a Condo unit in downtown Toronto is still legally the same concept. We see sets of couples combining their assets to buy houses in Etobicoke to live in. Each couple takes one side of the house and share the kitchen, living room and such. As the market pushes ahead we will see more inventive ways becoming common. Necessity is the mother of invention.

Finding Information To Help With Co-Ownership Buildings.

We have plenty more good, practical information to assist you with your enquiries than is in this Toronto Co-Ownership Guide. From securing financing to making an offer to purchase and beyond. Co-ownership is often misunderstood or confused with Co-op and Condominium Real Estate. They are quite different forms of property ownership. We’d be happy to help you in your search.