Service Overview
Focused legal support for ila for a co-borrower not on title
A homebuyer may ask a parent, partner, relative, or friend to become a co-borrower to help qualify for a mortgage. When that person will not be registered on title, it is especially important to understand the difference between accepting repayment obligations and acquiring a registered ownership interest.
Independent Legal Advice, or ILA, gives you an opportunity to review the proposed arrangement with your own lawyer before signing. The lender may require an ILA certificate as part of its financing conditions, depending on the transaction and the documents involved.
Why independent legal advice matters
Co-borrowing can involve substantial financial responsibility even when someone else is expected to make the payments. The Financial Consumer Agency of Canada explains that a joint borrower is responsible for repaying the unpaid balance along with the other borrowers. The mortgage documents must be reviewed to understand your particular obligations and the lender’s rights. See the agency’s guidance for joint borrowers.
Our advice addresses the risk of the other borrower missing payments, the financial exposure created by the documents, and the significance of not being registered as an owner. We also assess whether you understand the arrangement and are choosing to sign freely, without pressure from the borrower or anyone else.
How our office can help
Our ILA process may include:
- Document review. Reviewing the mortgage commitment, standard charge terms, and related documents supplied by the lender or transaction lawyer.
- Explanation of your obligations. Discussing the repayment terms, what may happen following a default, and the distinction between your borrowing obligations and registered ownership.
- A private discussion. Meeting with you in person or virtually, as appropriate, to answer questions and assess your understanding and voluntary decision to proceed.
- Certificate and coordination. Where appropriate following the advice and signing process, completing the required ILA certificate and forwarding it to the transaction lawyer or lender with your authorization.
Who may need this service
- Parents helping an adult child qualify for a mortgage.
- Spouses or common-law partners where only one partner will be registered on title.
- Relatives or friends who have been asked to become co-borrowers without receiving a registered ownership interest.
If you have been asked to co-sign a mortgage without going on title, our office can help you understand the commitment before you decide whether to sign.