There is a unique approach to homeowning that is being highlighted in the city of Toronto with the idea of ‘speed-dating’ to find a partner. However, this method of ‘speed-dating’ has an interesting spin as the partner will not be looking for a romantic relationship, but instead, be looking to share the financing of a house.
In an article published by Global News, Lesli Gaynor was interviewed and described her event C-Harmony: Creating Co-operative Connections. This event saw Toronto residents come together to find another like-minded, potential homebuyer set on financing a home in Toronto’s torrid housing market.
“With the surge in property values in Toronto and the GTA, this is an interesting concept to assist buyers trying to get into the housing market. However, I do believe that this specific model comes with many risks, some of which you might not see until it is too late,” said Michael E.B. Taing, a corporate and real estate lawyer at Hummingbird Lawyers LLP.
The event allowed potential homebuyers the opportunity to share ideas and interests with one another in hopes of finding someone they clicked with, and would be willing to combine revenue and income to move forward with a purchase. Of course, some issues can arise from this.
“With ‘speed-dating’, a person’s investment for the most part is their time, emotions and some money,” Taing noted.
The Toronto Real Estate Board (TREB) released data earlier this month that highlighted the average cost of a home in Toronto; and appraising it at a staggering $921,000. “Let’s say for example, you buy a home in Toronto for $1,000,000 with this model and have one partner,” Taing explained. “Split equally, your required investment is $500,000. That’s still a $500,000 investment with somebody that you don’t really know, and it’s a lot of money.
“A person interested in this model is undoubtedly expecting their partner to be able to do their part in terms of paying their share of the mortgage payments, property taxes and utilities. What happens though if your partner suddenly loses their job, or has an unexpected illness or injury? Will they be in a position to continue making payments for the other person?”
Taing weighed in on the practicality of model like the C-Harmony event, “I think it is an interesting concept, but practically speaking I am not quite sure whether it will work. You can get lawyers involved to draft an agreement but the more interesting question is: will you be in the position to enforce it when the time comes?”
While the C-Harmony event does seem like it would be a strong method to help combat rising home costs, it doesn’t have depth to its planning, and the risks can surely outweigh the rewards.
“Whether or not this model becomes successful remains to be seen. If it does, it is going to be with people who have a little luck on their side and have a higher risk tolerance,” Taing said.
He also brought up a point on the other side of the argument, “Obviously, as you know, you can take the risk and it can be very rewarding. The person that you decide to invest with at the event could very well be a great person, a trusted person, have the financial resources and do what they say they are going to do to. But the point is, you won’t find that out until you go into it.”
Regardless of the risks and rewards in this specific method, people have already been financing and living in houses together. It is a common practice, as Taing said, “Colleagues are doing this, business partners are doing this, couples in relationships are doing this. They’re buying it together, but the difference is that they know each other, and there is trust.”
Of course, an unconventional idea like this was bound to come out of the woodwork. Toronto’s housing market has been a topic of interest for the last few years. Residential plots are becoming less prominent, and house prices have risen drastically. However, C-Harmony, while a great conceptual idea, may not be the answer to the real estate problem that Southern Ontario is facing.
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