Co-buying when you aren't a couple
By Amy Brown-Bowers • Bankrate.com

There have been co-ops, condos and co-signers -- and now, there are co-hos.

The term, coined by Time magazine, refers to communal homeowners or people who own property together but who are not couples, rather relatives, friends or acquaintances.

For some, co-ownership is an opportunity to climb onto the property ladder; for others, it's a matter of social connection. The benefits -- getting more for your money, having companionship, creating less of an environmental impact, sharing chores and resources -- are perhaps more obvious than the cautions. But there are important social, financial and legal matters to consider before proceeding.

Joint tenancy vs. tenants in common
One key consideration is whether you will co-buy as joint tenants or as tenants in common. When it comes to spouses or romantic partners, "tenancy would almost always be the preferred vehicle for ownership," says Garry J. Wise, a Toronto litigation lawyer and author. "Joint tenancy ... is a form of ownership that carries with it a right of survivorship," says Wise, which means if one of the owners dies, the title to the entire property automatically goes to the living partner.

"For two people who are at arm's length or friends who are doing something together, joint tenancy would be exactly the wrong idea," says Wise, primary contributor to the Wise Law Blog.

In these cases, the co-buyers would likely want to keep their interests separate so that if one of them passed away, his or her estate or beneficiaries would retain ownership.

"As a rule of thumb, unless you want your partners in the prospective property to get your interest in the property upon your death, don't go in as joint tenants," says Wise.

Plan for the relationship to end
There is a lot to discuss before shopping for a property when it comes to co-buying: How will the mortgage be paid? How will taxes, household expenses, condo fees, repairs and upgrades be split? When and how will the property be sold?

"If you leave it undecided, people's subjective perceptions of what is fair at the time when you're in dispute often involve other considerations that go way beyond these kinds of business matters," says Wise. "By entering into a written agreement that addresses the possible eventualities in advance, much uncertainty and potential bad will down the road can be avoided. This is far less costly -- in human and financial terms -- than having a court decide after the fact."

Robert Barkin, a Toronto sales representative with Royal LePage Realty who has worked with a number of co-buyers over the years, recalls a group of friends, newly graduated from university, who approached him about co-buying in Toronto's Little Italy.

"I recommended to them before proceeding any further that they should really sit down with a lawyer and lay down the ground rules. It's kind of like a pre-nup agreement, but it's a pre-buying agreement," he says.