Ontario’s Progressive Conservative government has produced a new consumer guide that includes mortgage tips, insurance and conflict mediation advice for those wishing to enter home co-ownership together.
“Solving Ontario’s housing crisis is going to take new and innovative ideas,” said Minister of Municipal Affairs and Housing Steve Clark in a news release.
The new guide also includes advice on how to navigate trickier situations such as negligence, disputes and what to do if one of the co-owners wants to leave the ownership arrangement – a situation Minister Clark says will “create more choice for Ontarians” in the housing market.
“I agree with the province that this is a great new way of looking at getting into the housing market,” said Lesli Gaynor, who works at Forest Hill Downtown Real Estate, “but what it doesn’t do is talk about its commitment to making some systemic changes.”
Gaynor said people look to home ownership not only as a way to make housing more affordable but also to create a sense of community. People are drawn to co-ownership for a variety of reasons, ranging from affordability to a desire for more community or other social supports. In fact, stories of friends pooling their resources to purchase a home have been common in the news this year.
Gaynor told Toronto Storeys earlier this year that there are ways other than co-ownership to get into the housing market.
For example, said Gaynor “try and buy something that you can live in and work to make it your dream home. Buy below your expectations, but always remember that you can’t mortgage renovations.
“You have to have capital, which is why people should take the slow approach to taking a property. Of course, if you take this approach, you’ll want to ensure there’s nothing structurally wrong with it.”
She added, “come into the market with lower expectations and a willingness to get your hands dirty. Look for a diamond in the ruff and that’s true across the board.”
As for co-ownership, the nitty-gritty details of sorting out collaborative financing are often omitted.
Gaynor, who bought her first home at 24 with a friend, said the government had to work on improving regulatory changes in Ontario’s Mortgages Act since most lenders are reluctant to approve mortgages with multiple owners.
Cases of “fractional ownership” in a property are not fully recognized, says Gaynor.
“People end up being stuck in a property where they’d like to exit but then there’s no one to replace them because you have to dissolve the mortgage,” she told CBC Toronto.
“There’s really nothing new that they’re publishing here,” said Pat Simmonds, a realtor with Re/Max Hallmark in Toronto who has first-hand experience on co-ownership arrangements.
“The whole field is fraught with difficulty,” Simonds added, “which is probably why a lot of people generally don’t do it.”