What legal risks come with a joint-venture rent-to-own arrangement on an investment property in Ontario?

Joint-venture rent-to-own arrangements often blend an investment partnership between the parties with what is, in substance, a residential tenancy for the occupant living in the property, and this blending is exactly where legal risk tends to arise. Courts and the Landlord and Tenant Board can look past the labels used in the paperwork to the real relationship between the parties, so calling someone a "tenant-buyer" or a "partner" does not automatically determine how the arrangement will actually be treated if it is disputed.

Common risk areas include unclear decision-making authority between the joint-venture partners, uncertainty about what happens if the occupant stops making payments, and disputes over whether the occupant is legally a tenant with the protections that come with that status, a prospective purchaser under a separate agreement, or both at once. Because these structures are often built from templates rather than tailored legal advice, and because the consequences of getting the characterization wrong can be significant, have any such arrangement independently reviewed by a lawyer before committing money or signing on, rather than assuming a popular structure is automatically sound.