HOME EQUITY FREQUENTLY ASKED QUESTIONS

HOW ARE COSTS SHARED?

The initial agreement determines how the costs will be apportioned. For example, 1) you many want to apportion costs depending on how much each owner contributed towards the downpayment 2) you may apportion costs/shares according to the proportion of living space.
ie A house with 2 bedrooms on the main floor and a 1 bedroom apartment in the basement may share a 60/40 split.
A duplex with 2 units of equal or similar size may split everything 50/50.

WHO PAYS FOR REPAIRS?

Routine maintenance and repairs can be shared in the same proportion as ownership. You may want to have each owner responsible for repair and upgrade to their own living space.

WHAT ABOUT RENOVATIONS?

There are different ways to handle renovations—as always , the method should be agreed upon before the money is spent. You may consider the reason for the renovations—will it improve the overall value of the home; or is it for the personal enjoyment of one owner only—Owners may agree to share the cost of the first but not the second, but they may adjust the shares once they sell if there is an increase in value due to the renovation.

WHAT IF ONE OWNER HAS A JOB TRANSFER OR CANNOT MAKE PAYMENTS?

The remaining owner can opt to buy out the other or, if that is not possible, they may look for another buyer to take over, subject to the approval of the remaining owner. Failing these options, they may sell the property with the added expense due to the forced sale to be paid by the owner who instigated the sale.

WHAT HAPPENS AT THE END OF THE TERM?

There are actually 4 options:

1. renew the agreement and continue on
2. one owner buys the other out
3. one owner sells his share to another person, with the approval of the remaining owner
4. sell the house and share the proceeds

WHY CHOOSE THE PROPERTY CONNECTORS?

• A real estate agent and mortgage broker working together on your behalf
• Access to a well developed agreement for consideration of both parties
• Have willing lenders who understand the equity sharing concept
• Have a database of co-owners to match you with
• Provide regular updates of potential homes through on-line blog and email
• Host periodic events where you can meet others interested in joint ownership and ask questions
  

WHERE DO YOU FIND YOUR EQUITY PARTNER?

You may find a friend or relative that is willing to join you in your venture. Someone you know, may know someone who has a dream of home ownership, or you can register with The Property Connectors and we will help to match you with someone in the same market as you are.

The Property Connectors will host open information seminars where members of our database can socialize with each other.

How much can I afford?

Check out the CMHC calculator at http://www.cmhc.ca/en/co/buho/buho_007.cfm

Click to register with The Property Connectors!