Two Friends, One Mortgage: Buying Together the Right Way in Sudbury

The situation

Oksana, a retail worker, was separating from her spouse and needed to find a home for herself and her two children. On her income alone, a lender would only pre-approve her for a mortgage well below what a house in Sudbury cost. Renting was an option, but with two kids settling into a new routine, she wanted stability rather than another move in a year or two.

Her friend Iryna, an early childhood educator, had a larger and steadier set of savings and had been thinking about buying rather than continuing to pay rent. Instead of each searching separately, they started talking about buying one house together, splitting the mortgage and the equity growth that came with it. A third friend, Tomasz, was part of those early conversations too, and for a few weeks the plan was a three-way purchase to spread the cost even further.

Tomasz withdrew before they made an offer, after he accepted a job that would take him out of the city within the year. Nobody was upset about it — it was a good outcome for him and an easy decision to make before any money had changed hands. But it left Oksana and Iryna with a clear thought: if Tomasz's change of plans had come six months later, after closing, unwinding it would have been far harder. They came to us before writing an offer, wanting a co-ownership agreement in place before they were legally tied to a property together.

The legal problem

Two people buying a home together are not spouses, and Ontario's family law rules for dividing property on separation do not apply to them. If Oksana and Iryna closed on a house with nothing more than the standard documents a lender and a real estate lawyer produce for any purchase, they would own the property, but almost none of the terms that actually mattered to their situation would be written down anywhere.

A few problems stood out. First, their contributions were not equal, and a plain joint tenancy — the default form of co-ownership many buyers fall into without discussing it — assumes equal shares and gives each owner an equal right to the whole property regardless of what each person put in. Second, neither of them had agreed on what would happen if one wanted to sell and the other did not. Under Ontario's Partition Act, any co-owner can apply to the Superior Court to force the sale of a jointly held property if the owners cannot agree, which is a blunt, expensive and slow tool compared to a plan the owners set for themselves. Third, Oksana's separation was not yet finalized, and the size of her down payment depended on how much she would receive from her ex-spouse in the eventual settlement — a figure that was still being negotiated when they started house hunting.

There was also a mortgage question sitting underneath the ownership question. Most lenders financing a purchase between two unrelated buyers treat both of them as jointly and severally liable for the entire mortgage, which means each is responsible for the full payment if the other stops paying, no matter what the two of them privately agree between themselves. That liability exists whether or not anything is written down. An agreement could not change what the lender required, but it could make sure that if one of them ever fell behind, there was already an agreed process for how the other would respond — step in and buy out the struggling owner's share, refinance to remove her from the mortgage, or, as a last resort, force a sale — instead of the two of them working that out for the first time under financial pressure.

None of this meant the plan was a bad idea. It meant the plan needed to be written down in enough detail that a future disagreement, or a future life change like the one Tomasz had just had, would have an answer already sitting in a drawer instead of becoming a dispute.

What we did

1. Confirmed the ownership structure before the offer went in. We recommended the two hold title as tenants in common rather than joint tenants, with ownership percentages set to match their actual contributions rather than a default 50/50 split. This meant each of them owned a defined, sellable share of the property rather than an undivided equal interest that ignored who had put in what.
2. Drafted a co-ownership agreement setting out the buyout process. The agreement gave each owner a right of first refusal if the other wanted to sell their share, a defined process for getting an independent appraisal if they disagreed on value, and a notice period so neither owner could force a rushed decision on the other. It also addressed what would happen if one owner wanted out for a reason like Tomasz's — a job relocation, a new relationship, or simply changing her mind — distinct from a default or a dispute.
3. Built in an unequal expense-sharing formula. Mortgage payments, property tax and major repairs were split in proportion to ownership share rather than evenly, so Iryna's larger stake also meant a larger share of ongoing costs, matching what each of them had put in at closing.
4. Addressed Oksana's pending separation directly. Because her down payment depended on a settlement that was not yet final, we timed the agreement to reference the amount she was actually contributing at closing, and flagged for her family law counsel that the equalization payment she was negotiating should be finalized in writing before those funds were used as a down payment, so there was no ambiguity later about where the money had come from.
5. Coordinated the agreement with the real estate closing. The co-ownership agreement was signed before the purchase closed, so the ownership percentages on title matched the agreement from day one rather than needing to be corrected afterward.

The outcome

Oksana and Iryna closed on a house in Sudbury priced at roughly $360,000. Oksana contributed about $36,000 toward the down payment, largely from funds confirmed through her separation, and Iryna contributed about $54,000, for a combined down payment of $90,000 against a mortgage of roughly $270,000 held jointly by both of them. Their ownership shares were set at 40 percent for Oksana and 60 percent for Iryna, matching the ratio of what each had put in, and their agreement split ongoing mortgage, tax and maintenance costs the same way.

The agreement they signed did not need to be used in a crisis, and that was the point. It sat in the background while Oksana settled her children into the new house and Iryna kept building equity instead of paying rent. Two years later, when Oksana's separation settlement finally closed and she considered whether she wanted to buy out Iryna's share and own the home outright, the mechanism for doing that — the appraisal process, the notice period, the payment terms — was already written down. What could have been a difficult renegotiation between two friends became a straightforward conversation about numbers they had already agreed on how to calculate.

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