Do I need a co-ownership agreement when buying a property with a friend in Ontario?

A co-ownership agreement is not legally required, but it is strongly recommended any time you buy property with someone who is not your spouse. Without one, you and your co-owner are governed by Ontario's default property law rules, which may not reflect what you actually agreed.

A co-ownership agreement typically covers: each party's ownership percentage, how operating costs (mortgage, taxes, insurance, maintenance) are shared, who has the right to live in or use the property, what happens if one party wants to sell, a pre-emptive right for the other party to buy out the departing owner, how disputes are resolved, and what happens on the death of one co-owner.

If you skip this agreement and later disagree on any of these points, your options narrow quickly. One co-owner can apply to court under the Partition Act to force a sale, which is time-consuming and expensive. Without an agreed buyout mechanism, you could end up selling a property you wanted to keep, or being bought out at a price you believe is too low.

The cost of drafting a co-ownership agreement at the time of purchase is modest compared to the cost of litigation later. Your real estate lawyer can prepare one alongside the purchase transaction.