A couple of weeks ago we posted about how the increase in housing costs across Canada is making more and more people, millennials in particular, consider sharing a mortgage with friends or family to get into the market sooner.  If this seems like a good idea to you, beyond the usual roommate related discussions, you’re best to get a genuine contract together to help navigate any difficult conversations before you’re in the middle of potential landmines surrounding your living situation and personal relationships.

Here are six items to consider putting into your shared mortgage contract to make the lives of everyone involved a lot easier.*

1.    How you plan to share your ownership (this could include details of private space and common space within the home and time lines for cohabitation in the space)

2.    How are you splitting expenses (this includes everything from purchase price, down payments, property taxes to smaller, but regular items such as utilities, maintenance. and repairs)

3.    What will happen to the mortgage if one of you is no longer able to pay the pre-determined share of payments, this could include if one of the parties passes away, or needs to exit the agreement for an emergency situation.

4.    Future possibilities to determine how to divide up the house should: a) one of you want to keep the house and the other(s) do not b) multiple stakeholders in the property want to keep the house and buy the other(s) out c) No one wants to keep the property

5.    How the value of the property will be assessed should you decide to sell to each other, or sell externally

6.    A cohabitation agreement section that will cover ongoing house rules and responsibilities

*These contract suggestions should in no way replace the advice or counsel of a lawyer.

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