A Co-Purchaser Backs Out Before Closing in Ontario: What Happens to the Deal

Buying a home with a friend, sibling, or parent as co-purchasers is common — and usually straightforward, right up until one of you can’t or won’t complete the purchase. Days before closing, one co-purchaser backs out, and the rest of you are left wondering whether the deal is dead, whether you’re still on the hook, and whether you can somehow complete without them.

The answer depends on how your Agreement of Purchase and Sale is structured, what the seller is willing to accept, and whether the remaining purchasers can actually qualify to complete on their own. None of those questions have a one-size-fits-all answer — but understanding the framework helps you act quickly, which matters more than almost anything else in this situation.

Why One Person’s Refusal Threatens the Whole Deal

Most Agreements of Purchase and Sale signed by multiple buyers make each co-purchaser responsible for the whole obligation to complete, not just their proportionate share — commonly described as joint and several liability. When one co-purchaser refuses to close, the seller doesn’t automatically lose their claim against the others. But the seller’s legal right to pursue everyone is a separate question from whether the remaining buyer or buyers can actually complete the purchase — qualify for financing and fund the closing — without the person who dropped out.

The Seller’s Position

From the seller’s perspective, the identity of exactly which buyer shows up to complete usually matters less than whether the full purchase price and closing obligations are met by the parties named in the agreement. A seller generally isn’t required to accept a change in who actually completes the purchase unless the agreement allows it or the seller agrees. If the deal doesn’t close as documented, the seller has the same general default remedies available as in any purchaser default, which can include a claim against the deposit and, potentially, a claim for damages.

If You’re a Remaining Co-Purchaser: Your Options

If you can qualify and complete on your own

Some lenders will requalify a mortgage application based on the remaining purchaser’s or purchasers’ income and credit alone. If that’s realistic, your next step is confirming — in writing, through your lawyer — whether the seller will accept the remaining purchasers completing without the person who backed out, since this technically changes who’s performing the contract.

If you can’t complete without them

If financing depended on the departing co-purchaser’s income, or the purchase simply isn’t affordable without them, you’re in a harder position. The seller may treat the transaction as unable to close as agreed, which can expose all named purchasers — including you — to the seller’s default remedies, even though you didn’t personally cause the problem.

Either way, get your lawyer involved immediately

The moment you know a co-purchaser won’t complete, tell your lawyer before the closing date, not after. There may be a narrow window to renegotiate directly with the seller, extend the closing, or restructure the transaction before a default is declared.

Protecting Yourself Before It Happens

If you’re buying with someone else for an investment or a shared home, a separate agreement between the co-purchasers — sometimes called a co-ownership or cost-sharing agreement — that spells out what happens if one person can’t or won’t close is worth arranging alongside the purchase itself. It won’t change your obligations to the seller, but it gives you a clear, agreed path for sorting things out between yourselves afterward.

Frequently asked questions