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?
You may want to look at other lenders and options. See if you can find one that will allow you and your friend to set it up the way you described. Another option is to look for private lenders to fund your deals. Hope that helps!
Title is very important in property ownership, without which you will loose out-rightly.
To legally cover your investment portfolio, I would advise that you enter into a separate agreement with the borrower to the effect that the money is for acquisition of property with full details disclosed and that by virtue of such monetary investment, you own substantial stake in the property.
That way, your name will not be in the title, but by the agreement, you have covered your investment, if he agrees to sign it.
For further legal guidance, you can extend a call or email to clarify more on property ownership and acquisition.
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.