Buying a fraction of a house not so simple, lawyer says
The chance to buy a portion of a park-side home in downtown Toronto doesn't come up often, but one local real estate lawyer says it may not worth be pursuing if you can't buy the whole thing.
Mark Weisleder recently heard about the Toronto man who is selling his home on the edge of Trinity Bellwoods Park for $1.7 million.
But Weisleder said the arrangement being offered isn't one that he would recommend to clients, mainly because it will be difficult for a buyer to get a mortgage.
"Lenders don't like giving a mortgage over a small piece of a house because if it goes into default, it's going to be difficult to sell it," Weisleder told CBC Radio's Metro Morning on Thursday.
"And that is going to be the main challenge facing a buyer, is raising the money to buy the property."
Weisleder said that if such a partial sale was to go forward, it would be necessary to draw up a partnership agreement to define the responsibilities of each of the parties.
That agreement would have to lay out the plan that would proceed if one of the parties died, defaulted on expenses or wanted to sell.
"If you get a proper partnership done in advance and you cover all these issues, then hopefully you'll never have to deal with them. And more important, you don’t have to go to lawyers to figure it out if there is a problem later," he said.
Without such an agreement in place, Weiseleder said things can get messy when problems arise.
And those issues typically end up being solved in court.
"You can imagine how much money it takes to do that. You've got to file papers, have hearings, motions and whenever people go to court, the only winners are the lawyers because of the fees that are paid," said Weisleder.
"And that's why it's very important to have all of these obligations set down before you make the purchase."