Most people buy a home with someone else. In 2015, 62% of Canadians surveyed said they bought their homes with a spouse or partner, while only 35% said they bought on their own.1
Not only is it easier to save up your down payment when buying with a partner but it also makes monthly carrying costs like your mortgage and utilities easier too. There are many different scenarios people enter into when buying together and it can be hard to navigate the complications of buying and financing a home together.
Here are some things to consider when buying and living with someone else.
Although the majority of buyers do buy with others, popularity is growing outside of traditional spouse or partner scenarios, to include parents, siblings, and friends. This can happen in a number of different ways:
When buying a home and living together, it’s a good idea to have a cohabitation agreement written up by a real estate lawyer.
A cohabitation agreement sets out the rules of the purchase, setting expectations and arrangements between the buying parties who will live together.
It’s up to the two (or more) individuals buying to decide what to include in the agreement.
Cohabitation agreements can also be drawn up when one person moves into another person’s home. It can include rent, expenses, or even asset splitting.
When you have a roommate living with you (meaning not renting a separately enclosed portion of the house), you need to lay out guidelines. When one person is paying the other rent, there are important considerations that should be addressed in a rental agreement like the ones below:
If you are in a relationship with someone and live with that person for 12 consecutive months, you’re in a common-law relationship. According to the Family Law Act in Ontario (and similar acts across the country), property you bring into the relationship would still be yours when the relationship ends.
The rules set out in the Family Law Act in Ontario (and similar acts across the country) do not apply to common-law relationships. When you separate, the only material possessions you have to divide or dispute are those which were purchased by both parties—like a car or major furniture, for example.
When you get married and move into a home together, your home is then called a Matrimonial Home. This occurs regardless of whether one or both people are on the home’s title, and the home value is divided 50/50 should the marriage end. A prenuptial agreement could nullify the matrimonial home, if it’s included in the agreement.
Whether you’re living with a spouse, family, or a buying partner, the most basic point is often ignored: your lives now affect one another. In a partnership, people bring in opinions on how best to live in a number of areas, including dividing bills, common space, buying things for the house, etc. Buying the home and paying the mortgage is complicated, but so is living with another human being.