Question
I want to help a friend by providing cash up front to cover their full 20% deposit on the property in exchange for 20% ownership. However, the bank won't provide them a mortgage at a competitive residential rate if there is a co-investor entity such as a unit trust. I want to remain silent. Can I be on title still? And if not on title, how can I safeguard my share and have security over the asset to some extent?
Answer
This is a very good question. In Canada, Quebec, there is something that we call "Contre-Lettre" I believe that is also common in other countries. In order to safeguard your share and assets, you must request a document (counter-Letter) from the notary which stipulate you have ownership of 20% and you will be responsible to pay revenue generated from of this asset. If dispute may occur between you and your co-investor in the future, the law is clear: the counter letter prevails over the apparent contract.
