Sharing Equity Housing Co-operatives — Homeownership for Less
Published on 29 August 2022, 07:22:56 AM
Put your home buying worries aside with a shared equity co-op.
It’s homeownership for less, without the responsibilities of owning title to a property. You can buy into a project, or design and develop your own housing co-operative and control who owns shares.
Talking about a good deal:
Quick Read
Do I own my unit in an equity co-op?
How do you find shared equity shares?
Who pays for maintenance in an equity co-op?
Why do I need a real estate attorney?
Little Known Co-ops Are Big Value
National Post calls co-op living “flying under the radar” (Feb. 9, 2015). Equity co-op owners are found in every corner of the GTA, from small walk ups to new apartment buildings. Trovit.com has units from under $200,000 to a high of $824,900 in (yup) Rosedale.
Living the Co-op Dream
Where else would you get 999 square feet for $399,900 in Centennial Park? A leafy, tree-lined street outside your expansive balcony. Room enough for a traditional dining suite and buffet. Close to transit — no uncommonly long walks here. The big advantage of equity co-op living is the low maintenance costs. Just $357 a month pays property taxes, water, heat, building insurance and common elements for this one.
Who Owns Your Unit in Housing Co-operatives
Sharing an equity co-op home can be a money saver. What to know before you buy or build –:
Did we say shares? We did. Shared equity co-op corporations own and manage their land and buildings in common. Because equity co-operatives are incorporated, shareholders buy the exclusive right to live in a housing unit, not the unit itself.
You are an owner in common with every other party who holds shares in an equity co-op, and pay a monthly fee for its upkeep. Compared to a condo, what you don’t get in an equity co-op is title to the property, or the opportunity to buy property you can rent without restrictions.
Instead, shareholders are members of a corporation, governed by the Ontario Co-operative Corporations Act. See your obligations in a housing co-op.
What to Expect in a Shared Equity Co-op
Shareholders make tradeoffs to buy into a co-op instead of a condo.
- All shareholders are financially liable for the blanket mortgage on the housing co-operative until it’s paid in full.
- You pay if other shareholders renege on upkeep or maintenance charges, insurance, and co-op property taxes. That explains why co-op boards vette who buys your shares if you sell.
- Whether you profit from a share sale, or are charged a penalty for “flipping” your shares, is up to the board. That doesn’t mean you escape taxes. Land transfer tax is due on your shares’ value when you sell. Who pays land transfer tax.
- A shared equity co-op has bylaws, rules, and regulations like any Ontario business corporation. While that keeps prices lower, it means buildings with more than 35 shares are governed by the Financial Services Commission of Ontario, like any business corporation.
Find shared equity co-ops in Ontario.
Caring For Your New Home
Unlike strata buildings that usually hire a management company, equity co-op owners may bear the burden of keeping the building ship shape. The differences don’t stop there. You could do everything from taking out the recycling and tending the compost to juggling the books. When you buy into a co-op, you’re an equal share owner and that means actively contributing, not living relatively carefree like a condo owner.
Financing Shared Equity Co-ops in the GTA
Lenders like DUCA or Northern Birch (formerly Estonian and Latvian) Credit Union specialize in co-op mortgages for shared equity co-ops. They’ve been helping GTA residents get into affordable housing since before you got that homeownership gleam in your eye. Read about equity co-ops or talk to the Ontario Co-operative Association about developing your own. Forms you need to start an Ontario housing co-operative.
How Co-Housing Compares to Co-ops
Co-housing owners own a percentage of real property, otherwise known as title to lands and buildings. Like a housing co-operative shareholder, that gives you occupancy rights only. But you can buy or sell co-housing shares without consent, and even mortgage your unit.
Unlike a shared equity co-op, co-housing projects are governed by contract law. The Province of Ontario’s co-ownership guidelines stop short of protections laws like the Condominium Act offer other types of housing. Co-housing disputes are settled through negotiation, mediation, or legal action.
Co-housing financing is through private lenders — potentially a second mortgage if your co-housing project has a blanket mortgage in place — or arrangements between the Canadian Cohousing Network and Cohousing Options Canada. Vendor take-back mortgages are common for co-housing. Take over an assumable mortgage.
Affordable Real Estate Lawyers, Anywhere You Are
Access lawyers for less in Greater Toronto Area, Ottawa, or anywhere in Ontario when you buy, sell, or transfer property. Axess Law’s flat fee real estate lawyers are affordable, and our rates are all inclusive (excluding taxes, disbursements, and third-party charges). Axess Law offers you only the legal services you absolutely need. Your final invoice includes no surprises or hidden charges. Your itemized statement of adjustments is explained when we deliver it, and we answer any questions you have about it.
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