What You Should Know Before Buying a House With Someone Else


Does the high cost of Toronto real estate make buying a new property feel next to impossible? If you’re in the rental market, you may really feel stuck. On the one hand, housing prices are out of reach for many people, even though the market has softened over the past year. On the other, rental costs are skyrocketing, making it difficult to find an affordable place to live anywhere in the city. 

If you can find a way to buy a house, you will at least start to build equity and stabilize your financial future. And with a bit of creativity and help from your loved ones, the dream of owning a home may not be as far away as you think.

Is Team Buying the Solution You’re Looking For?

For many first-time home buyers, going in with a trusted partner can be a way to break into the real estate market. The sooner you buy, the less money you’ll throw away on rent. Plus, you’ll stand to make more equity gains over time.

With the population of Toronto only expected to grow, grow, and then grow some more, housing values will begin to rise substantially. But are you really prepared to undertake this adventure with another party? If you’re going to buy as a team, you should know what you’re up against, legally and financially. 

For example, your partner may agree to provide all or part of the down payment in exchange for being on the lease. Still, this leaves you with the monthly carrying costs, including the mortgage, mortgage insurance (if applicable), utility bills, and property taxes. All of this can add up, and you still need to set money aside to cover unexpected maintenance costs.

Before signing a lease with a partner, talk to a real estate lawyer and a financial advisor to ensure your interests are protected.

If you decide to proceed with your purchase, you can choose from two types of purchase agreements.

Joint Tenants

If you and your partner go in as joint tenants, you each have equal rights to the property. Each person on the title can occupy and make decisions regarding the home. If two names are on the title, both have 50% ownership. If four people enter into a joint tenancy, each owner has a 25% stake. 

As joint tenants, no one can bequeath their share to an outside party in the event of their death. If one of the purchasing partners dies, their ownership share automatically transfers to the other owners. 

For example, imagine you purchased a home together with your sibling and a grandparent. You each own 33.33% of the property. If your grandparent passes away, you and your sibling now have a 50% share in the house. The automatic transfer of ownership makes this arrangement popular among married couples or family members. 

The advantage of this contract is that the property does not need to go through probate. Your loved ones are automatically entitled to your share, with little to no room for dispute.

What should you look for when house-hunting? Here are some ideas to help find the perfect fit:

Severing Joint Tenants

If you decide to purchase as a Joint Tenant, you should know that either party can sever the agreement with or without your knowledge or consent. How? Imagine you buy a property with the help of a parent. Both your names go onto the title, and you move into your new home. All’s well that ends well, or so you think. 

What you don’t realize is that your parent transferred their share of the property to your sibling. Now, ownership has become a “Tenants in Common” arrangement, and automatic succession no longer applies.

Alternatively, both parties can sever joint ownership by coming to a mutual agreement.

Once you’ve found your house, the next step is to make it “your home.” A few of our design-inspired posts will help:

Tenants in Common

Tenants in Common is an arrangement where each purchasing partner holds separate and distinct property ownership. In this case, let’s imagine you purchased a home with three of your friends. Each of you could own a one-third stake in the property. However, unlike a joint tenancy, you are not limited to equal distribution.

Imagine that you are the one fronting the money for the down payment. The monthly carrying costs will be split between the three of you. Since you are paying more, it might not be fair that you get one-third ownership.

In this case, you and your friends might agree that you own 50%, and they each take a 25% share. Under Tenants in Common, you can divvy up ownership however you see fit as long as all purchasing parties agree. 

Another critical difference between Joint Tenants and Tenants in Common is how succession planning works. In the event of your death, your share does not transfer to the other owners. Instead, you can use your will to bequeath your portion to whomever you choose.

Under Tenants in Common, you will want to ensure your wishes are carefully laid out in your will. Otherwise, the property could go through probate until everything is settled, which takes time and can be expensive.

Buying a property as a team can make home ownership far more affordable and less stressful. However, it’s crucial to understand your rights and responsibilities. An experienced real estate agent and a lawyer can help you make an educated decision.

Are you thinking about buying, selling, or investing in Toronto? We are local real estate experts and would love to help you get started. Reach out to us at or call 647.232.7317 for more information.