Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m J A N U A R Y 2 0 1 6 13 T he high price of home ownership in places such as Vancouver is leading to new business opportunities for creative real estate lawyers able to put together co-ownership deals for their clients. "It is something I am passionate about," said Richard Bell, co-founder of law firm Bell Alliance, who maintains co- ownership is "exploding and growing rap- idly" in Vancouver's residential real estate market as young couples look for new avenues to home ownership. He recently shared his home with his daughter Heather, a lawyer in his firm, and her husband. He is dividing his west-side home into two living residences and building an additional lane house that can be used as a rental, a home for his other daughter, or as a granny flat. "We just never thought we would own a home," said Heather, who along with her spouse took a 20-per-cent share in the family home. She sees many benefits: staying in a traditional family home, having family members around for child care in the future, and being able to provide care for parents or grandparents living together. "We are building future possibilities for each side," she said. Bell said he fields at least one call a week from individuals looking to co-own. He also often speaks on the topic to groups of owners and would-be buyers. He sees three general categories of co-owners: couples who come together to co-own a property as an investment; family-related co-ownership (parents, children, and/ or granparents), and situations such as divorce where one person moves out but the home becomes co-owned in order to allow the children to stay in their house. Co-owning or sharing a home is a bit of back to the future where multi-gener- ations commonly used to live under one roof. The arrangement provides benefits ranging from childcare by grandparents to allowing young married couples to save money for their home or investing in a rental property. Andrea Rasmussen, of Wilson Rasmus- sen LLP, practises in Surrey, which has a large East Indian population. She says while several names may appear on the property title, it is not that common in the East Indian community to have a co-own- ership agreement. "There is often just an understanding," she said. However, Rasmussen favours solid co-ownership agreements. The varying arrangements families, friends, and investors are making to get into today's pricey real estate market is leading to some creative chal- lenges for lawyers who have to work out the logistics. Ras- mussen maintains that virtually no agree- ment is the same. They can be complex — outlining all details from "who will take out the garbage to who will mow the lawn" — while others are mainly driven by deter- mining cost sharing and exit strategies. It also becomes the lawyer's task to look at the family dynamics and ask questions not yet considered, such as if parents are paying the down payment do they get that money back when the house is sold? Bell agrees co-ownership is really "all about legal documentation" and the downstream impact if not considered can be significant. In families, it can also affect estate planning, in that one child may receive a benefit that other children do not. In divorces, that co-ownership of the home affects the alimony settlement as the spouse staying in the home is getting a rental benefit. Real estate lawyer Tim Lack, at Lunny Atmore LLP, says co-ownership has been a strategy for investing into the residen- tial home market for years. "Anyone who has been in practice for more than a year or two has a good standard co-ownership agreement available" that is tweaked to suit the situation. "I've done dozens of these things." Occasionally, one of the investors will live in the property. But the trend toward family members sharing ownership is something he is just starting to see. It is often complicated by the difficul- ty of a financial institution approving a new co-owner if one exits, he says. Credit union Vancity entered the co-ownership market in 2006 and actively courts it with a product called the Mixer Mortgage. While still a rare product on the market, it has become increasingly popular with co-owners. "It was born out of the sheer prices of real estate," said Ryan McKinley, Vancity's senior mortgage development manager. While the mortgage is in the name of all the parties buying the home, each party is allowed his or her own terms — either fixed or variable. The Mixer involves three aspects: the type of terms each party wants; a co-owners agreement; and an insurance policy that covers the various parties in the event of death or disability. Bell sees co-ownership growing as cities densify yet attempt to find ways to hold on to traditional neighbourhoods. Under Vancouver's bylaws, a single fam- ily home can have a suite or additional living area plus a lane house, providing the potential for three families to live on site. He envisioned the day when there will be the provision to legally divide such a lot into a strata and sell each por- tion with a separate mortgage. "It is something that has been dis- cussed," said McKinley, although it would also need approval by the city. The dif- ficulty still remains in how to value the various areas. Bell agrees it is a challenge, but not insurmountable as it can be done on the basis of a portion of the land value and the building. "There are few other solutions to affordability in the city," he said. — JEAN SORENSEN jean_sorensen@telus.net \ AT L A N T I C \ C E N T R A L \ W E S T REGIONAL WRAP-UP Pricey homes offer new opportunities for real estate lawyers Richard Bell

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