Mortgage a Townhouse You Tenant in Common

Published on 29 August 2022, 07:22:56 AM

Mortgage a townhouse for less than a single home or condo, with a tenancy in common (TIC) agreement. 

Sound familiar? It may, if you rent a property with roommates, or share a family home with a common law spouse in Ontario.

What’s new when you mortgage a townhouse as a TIC is that any number of strangers (that fit in a unit) live together, in a multi-family property on a shared lot.

If that feels like a stacked townhouse, read on. 

What to look for in a real estate purchase and sale agreement in Ontario. 

A New Way to Mortgage a Townhouse  

Being able to mortgage a townhouse property you share may not sound too appealing. But with TICs, buyers live in their own unit, and share the building and lot. Unlike a condo, you won’t own an individual unit on a lot. 

TICs Lower First Time Buyer Prices

The TIC option has taken off in Los Angeles and San Francisco where, like the Greater Toronto Area, being able to mortgage for a townhouse can seem out of reach. Lowering the price tag is a must for a first time home buyer. 

Buyers Get Exclusive Rights

While TICs may look like stacked townhouses (they’re joined and on a single lot), the similarities stop there. TICs give buyers shares in a townhouse development, rather than a townhouse unit. In exchange for a mortgage for a townhouse property, owners get the exclusive right to occupy a unit of their own. Monthly HOA fees, or homeowner association levies, pay for maintenance and upkeep. 

Zoning Makes TICs Feasible

Supportive zoning bylaws make the model work by allowing multiple townhouses on a traditional single family lot. Owners in Los Angeles’ Arlington Heights paid up to $849,000 USD each to mortgage a townhouse that’s new, three bedrooms and stacked. Developers B&A Group LLC estimate the units, and presumably a mortgage for a townhouse, cost buyers 9% to 26% less than the average new home. Real estate brokers say 10% to 15% savings are realistic.

Protecting Your Legal Interests in a TIC

Like other financial assets, you would want to protect your TIC should you pass away. The downside to tenancy in common agreements is that co-owners can decide to lease or sell their interest without your consent, or Will their unit to beneficiaries.

While you may have started out sharing your building with like-minded individuals, neighbourly relations can go south if you dislike the new residents. Making a cohabitation agreement with your TIC neighbours could keep the arrangement operating smoothly.

If your TIC property is a matrimonial or family home, you definitely want a Will, naming your spouse or partner as a joint tenant. Otherwise, transferring your TIC property to your spouse could get tied up in Ontario’s intestacy laws. And that could make it a very long time before they get clear title.

Why You Need a Real Estate Lawyer 

Tenancy in common agreements are legally binding contracts. Get independent legal advice from Axess Law before you commit to an arrangement that affects your financial interests, and bequeaths to beneficiaries.

When to get independent legal advice for real estate purchases. 

Axess Law drafts TIC agreements, or reviews agreements for purchase and sale that involve joint tenancies. We advise you on essential clauses your offer to purchase should include, and ensure you can withdraw if you change your mind about completing a real estate transaction. 

Our real estate lawyers answer any questions you may have, like:

• can a buyer back out of a purchase agreement in Ontario? 
• or what happens to the deposit when buying a house? 

Even if you have already signed an agreement of purchase and sale, Axess Law may be able to amend it on your behalf. Obtaining favourable mortgage financing can take longer than you or the seller expected. When you need more time, we negotiate with the sellers’ lawyer to ask to extend the completion date.

Our experienced legal team checks title to the property for construction liens or financial claims that can delay or prevent you from buying or selling a property. Axess Law discharges existing mortgages, and registers new mortgages against title by liaising with your bank, credit union, or trust company. When you get a private mortgage, we add that to your title. We transfer title to the property to your name, or add family members to a title if you are co-sharing the mortgage.

Adding name to house title in Ontario – cost and how it works

If you don’t have a Will, Axess Law’s Wills and estate lawyers can draft one for you. Our professional Wills lawyers ensure your home or land isn’t subject to intestacy rules for Ontarians who die without a Will.

Why your spouse has to agree to sell property in Ontario. 

Flat Fee Affordable Legal Services

Axess Law charges flat fee rates. You get only the legal services you need, for less than you might pay for traditional, hourly lawyer fees. 

We tell you upfront what our fees will be, and give you a final statement of adjustment explaining every fee or disbursement you paid. If you have questions about your expenses, we explain your bill in full. Our legal services are all-inclusive, with no hidden fees or extras to surprise you. 

Hire a real estate lawyer in Toronto or Ottawa. 

You save even more when you make a Will with a common law partner or legally married spouse in the same appointment. Axess Law can prepare individual or mirror Wills for spouses. You decide where your assets go after you pass on. 

Virtual Law Services for Less

Axess Law’s virtual real estate lawyer services can video conference with you anywhere in Ontario. You can talk to a lawyer from your home or office, using any computer or compatible mobile device. Our video conferencing services are secure and confidential.

If you’ve never used virtual video conferencing software before, we show you how. You can sign legal documents remotely, or drop into any Axess Law office in the Greater Toronto Area or Ottawa to finalize your real estate purchase or sale.

Book Appointments Online or By Phone

Our online or in person legal services let you arrange lawyer appointments day or evening, at times convenient for you. We make closing real estate transactions, or making title transfers easy for you, 7 days a week. Dial our 647-479-0118 lawyer line directly, or call toll free to 1-877-402-4207. Make appointments yourself by using our online booking form.

Axess Law has offices near you in Greater Toronto Area and Ottawa, with onsite parking and easy transit access.