Co-owning your home

What do I actually own?

You co-own the home you live in and no longer need to worry about a landlord knocking on the door and giving you 60 days' notice. If you decide to move, after your first year, you can do so with only 75 days' notice.

When you move after the first year, you'll get all your investments back plus your portion of how the value of the home changed while you lived there. If you need to move in your first year, depending on where you are living there's a 5-10% penalty, so it's best to know you want to live in the home for at least one year before you become an Owner-Resident.

Key's innovative model saves the hassles and many of the typical costs involved with buying and selling traditional real estate.

For Key homes that are pre-construction condos, there will be an interim occupancy period where you lease your home for a year and then become a full fledged Owner-Resident once you sign the Owner-Resident Agreement at the end of this transition period. The good news is you will still be building home equity during this lease period, as long as you convert to an Owner-Resident at the end of your lease.

Can I ever own the whole home?

Yes, Owner-Residents can decide to take on a mortgage and buy the home after the end of their third year, but there is no obligation. You can continue to stay a co-owner if you prefer. Either way, you are building home equity.

How many co-owners are there in the home?

As an Owner-Resident, you are the only co-owner living in the home. You co-own alongside Key’s investors or property owners. This provides an opportunity for you to build equity in the real estate market years sooner.

As a co-owner are you on title?

Owner-Residents co-own their home with the property owners. You have all the benefits of homeownership including growing home equity, security of occupancy, and the ability to customize. You also have the flexibility normally limited to renting, including lower monthly cash outflow, the ability to leave on short notice, and the flexibility and financial freedom of not being attached to a mortgage with high selling costs and break fees.

The property owner initially remains on title, which enables Owner-Residents to save on the typical costs associated with buying and selling real estate and provides them the freedom to move with short notice.

If you’re an Owner-Residents who aspires to be on title, you have the unique option with Key to take on a mortgage and purchase the home outright after three years of co-ownership. You can also continue to co-own and build equity on your terms – the choice is completely up to you and what works best for your stage in life.

Initial contribution and home valuations

How are the values of Key homes calculated?

Home values are determined based on the home size and fair market value.
With Key, prices are transparent to all parties, so everyone is treated fairly with an alignment of interests. Home values are set at the beginning of each term using fair market value estimates. The methodology is clearly set out in each operating agreement and agreed to by both parties. Certified appraisers confirm or adjust the automated valuation when an Owner-Resident is moving out.

If an Owner-Resident chooses to take on a mortgage after three years of co-ownership, the price is again verified or adjusted by an appraiser. And the home equity that the Owner-Resident has built while living there goes against the purchase price. The Key app tracks market value of the Owner-Resident’s home, so you have visibility into how the value of your home and investment is performing on a monthly basis.

With Key, prices are transparent to all parties, so there are no bidding wars or blind offers, none of the high costs and hassles associated with typical real estate transactions, and everyone is treated fairly with aaligned interests.

What’s the minimum initial contribution if I want to move in?

Each building will have a different initial contribution to become an Owner-Resident. They start from 2.5% of the home’s value (which is $15k for many of our homes). You can find this information on each of the home listings, so you’ll know exactly what’s required.

So, if you're interested in living in a home valued at $600,000, your initial 2.5% equity investment would be $15,000. If the home is $500,000, your initial investment would be even less ($12,500). Plus, you don't need to commit to a mortgage.

Can I contribute more to start?

Absolutely. And the more equity you own, the less you pay to live in your gorgeous home each month, plus your equity can grow faster since it’s based on your ownership.

What are the closing costs involved with co-ownership with Key?

Key's innovative model saves the hassles and many of the costs involved with buying and selling traditional real estate. After the first year, Owner-Residents can leave at any time with just 75-days notice and they get their investments plus their portion of how the value of the home appreciated while they lived there. Key’s fees are only $1000 of the Owner-Residents invested equity. In some cases, the property owner will take a small fee as well. It depends on the home.

If an Owner-Resident does decide to take on a mortgage after three years, the Owner-Resident will pay the costs associated with buying and selling real estate. First-time home buyers can take advantage of tax refunds and other incentives to help with this.

Your monthly financials

What does the monthly residency payment (MRP) cover?

Your MRP covers four important things. The majority covers the residency payment for the portion of the home you don’t yet own. It also covers property taxes and condo maintenance fees so you don’t have to manage multiple bills. Plus, every month a portion of your monthly payment will go towards growing your home equity with Key. This starts at $50 and is dependent on the home you are living in. There is a monthly $50 platform management fee that is split between both co-owners, based on the amount of equity you own, so if you own 2.5% of your home you would be paying just $1.25 monthly.

Can I add more to my home equity monthly?

Yes. Key gives you lots of flexibility so you can grow your home equity in ways that work best for you. If you prefer monthly, we can set up an additional monthly home equity investment for you. You can turn it off or change the amount any month as well. You can also make lump sum home equity investments if you prefer.

How Key’s home equity works

What happens to my initial investment?

Your initial investment grows with the value of your home. As with all real estate investments, you are taking on the risk of your home depreciating with the market. When you’re ready to move out, after your first year, you just need to give us 75 days’ notice and you’ll get your initial investment and any appreciation back, plus the appreciation on the Co-financing Benefit.

Does my monthly residency payment add to my equity

Yes. Every month a portion of your monthly payment will go towards growing your home equity with Key. This starts at $50 and is dependent on the building you are living in. The rest of the monthly payment covers important things like maintenance costs, shared building expenses, and property taxes.

You can contribute more to your equity as well. And on a monthly basis, you can roll in a monthly contribution, adding to your monthly payment. Even a little extra goes a long way over the year.

What happens to my additional equity contributions?

Like your initial investment, the value of your equity contributions will also grow with the value of your home. Plus, if you choose to participate in co-financing they will also be matched with $1 in leverage through Key’s Co-financing Benefit until your home equity reaches 25% of the home value. After this point, it is applied at a lower ratio.

Can we benefit from leverage with Key?
What is the Co-financing Benefit?

Key offers a Co-financing Benefit to help you build home equity faster. For every $1 you invest, you will also receive another $1 in leverage. Unlike a mortgage, you don't actually have to take on this debt in order to enjoy the benefit of leverage. The only cost to you for this benefit is a small interest charge.

The $1 to $1 Co-financing Benefit applies until your equity reaches 25% of the home value. After this point, it is applied at a lower ratio. You have the option not to participate in the Co-financing Benefit, if preferred. The choice is yours.

Key’s business approach

What’s stopping other investors from buying units and renting them at a higher rate?

Our strict social policies ensure that Key homes do not become secondary income properties for people simply looking to buy and then rent out the homes. Everyone who lives in a Key home is an Owner-Resident, like you.

How does Key make money?

Key makes money in a few ways, including through asset management, by driving greater efficiencies in how the homes are managed and, in some markets, property management. Plus, longer term, Key is developing a digital exchange and curated marketplace that will benefit our Owner-Residents.

Locations

Where does Key operate?

We launched in Toronto in December 2020, and now have 49 Owner-Residents who call Key home. We are continuing to grow our portfolio in Toronto and we have expanded into Kitchener and Calgary. Key is also launching in other Canadian and American cities later this year.

Our Key community

Who is Key right for?

Key is making homeownership accessible to all the people currently locked out of owning. Our community of Owner-Residents currently range in age from early 20’s to mid 50’s and include singles, couples and families across a wide range of professions. We have tech, finance and hospitality industry professionals, architects, nurses, teachers, entrepreneurs, and newcomers who are now building equity and enjoying the social and financial benefits of homeownership with Key.

Can I meet my fellow Owner-Residents?

Absolutely. We have a wonderfully diverse, talented and growing community of Owner-Residents. We host regular socials and other ways for everyone who’s interested to come together and it’s terrific to see the friendships emerging. We have a fun newsletter and online forum as well so you can connect virtually if you prefer.

Are dogs allowed?

Only the cute ones. So…all dogs, yes.

How does Key partner with Property Owners

What are the main benefits of co-ownership for Property Owners?

Property owners benefit from better residents with Key. We have a standing waitlist of qualified Aspiring Owners waiting to become Owner Residents. As co-owners, the Owner Residents are incentivized to treat the home like their own, which makes it easier and lowers the risk for Property Owners. The Owner Residents also stay longer and share pro-rata in repairs and maintenance, which delivers lower OPEX and vacancy for Property Owners. Key’s digital platform also simplifies the process of managing Owner Resident background and credit checks, monthly payments, property management, and more all in one place.

What Property Owners are currently using Key?

Key’s clients include leading developers, a real estate investment trust (REIT), and businesses and individuals who own multiple residential properties. By partnering with Key, they’ve benefitted from improved net operating income and also contributed to stronger communities by helping more people get on the homeownership ladder years sooner.

What do Owner Residents pay on a monthly basis?

Owner Residents pay a monthly residency payment (MRP) that includes a rent equivalent for the portion of the home they don't yet own, which is set by the investor at the start of each term. The MRP also covers taxes and HOA or other maintenance fees. The more an Owner Resident owns, the less rent equivalent they pay. Owner-Residents also pay for content & liability insurance, their prorated share of any repair & maintenance costs, and their prorated share of Key’s administration fee.

How is Key co-ownership agreement structured and who is on title?

Key’s arrangement between co-owners is governed by a contract called the Owner-Resident Agreement (ORA). It is a private contract with private arbitration.

Key’s residency passes the functional tests of true ownership: 1. the Owner Resident has equity participation in the home; 2. the Owner Resident has responsibility for the upkeep of the home, sharing in maintenance costs on a prorated basis; and, 3. the Owner Resident has a say in the management of the property, the ability to customize it and to perform renovations on a reasonable basis. 

The Property Owner stays on title while the Owner Residents are co-owners. If they decide to take on a mortgage after the first term to own the property fully, the title would then transfer to the Owner Resident.

Key’s roles and responsibilities

What is the relationship between the Property Owner and Key?

Key is a service provider to, and agent for, Property Owners (investors). Key is party to each Owner Resident Agreement, as the Agent for and on behalf of the investor. Key manages the co-ownership relationship, provides the platform and product, provides regular invoicing and reporting to co-owners, and manages the calculation, processing and remittance of monthly payments. If the Owner Resident has a request or needs help, they reach out to Key.

Is Key a property manager?

No. Key is a co-ownership technology provider and program administrator. The investor is still responsible for providing property management service to the home and resident. For some condominium portfolios in our initial market of Toronto, Key provides in-home property management services for an additional fee. If this is of interest to you, we can discuss property management for your portfolio.

What are Key’s fees for providing and administering co-ownership?

Key typically charges a flat fee of $50 per home per month. This fee is shared by co-owners on a prorated basis. So, if the Owner-Resident has a 5% ownership position they pay $2.50 to Key a month and the investor pays $47.50.

We charge a percentage of the home value for situations where we also provide property management services.

How Key's co-ownership model compares to other options

How is co-ownership different than renting my homes?

With co-ownership, Property Owners get a resident partner who is invested in their property, both financially and from a pride of ownership perspective. Key’s Homeownership-as-a-Service (HaaS) program helps Property Owners achieve higher net operating income (NOI) by driving down costs through; lower vacancy and turnover rates, lower costs of turnover, shared repair & maintenance costs, improving interim liquidity and better monitization of their assets.

Multiple residents can share tenancy, can multiple residents share co-ownership?

Key provides for one passive co-owner (the investor or property owner), and one resident co-owner. The Owner Resident can only share responsibility and liability with a spouse or direct family member. Key is not intended for co-ownership between multiple occupants so it is not like a timeshare or other types of co-living arrangements. Key is a new model for co-ownership between a resident and an investor, that’s designed to get more people into owning a piece of their principal residence.

How is Key different than Rent-to-own (RTO)?

Key residents are owners from day one, with an equity stake and the functional tests of true ownership with principal residency. Key is not a lease option or RTO scheme. There are no egregious fees or penalties with Key, and no specific timeline in which a full purchase has to be consummated in order to avoid penalties. Owner Residents are owners all the way through the journey, sharing in the home equity as well as the maintenance costs.

Resident equity contributions, valuations, and redemptions

How much equity in the home does each Owner Resident dollar buy?

With Key, prices are transparent to all parties, so everyone is treated fairly with an alignment of interests. Home values are set at the beginning of each term using fair market value estimates. The methodology is clearly set out in each operating agreement and agreed to by both parties. Each Owner Resident dollar contributed during the term buys a percentage of the home based on its total dollar value in the month that the Owner Resident contributes.

Are there minimum and maximum Owner Resident equity contributions?

Each operating agreement defines the initial minimum contribution, and any limits to annual contribution rate or maximum contribution prior to or in lieu of full purchase. The minimum initial contribution - typically between 1% and 5% of the value of the home - is designed to ensure a committed Owner Resident without introducing too high a barrier to co-ownership.

How is the value of the home established in the event of a purchase or sale?

The purchase option value of the home is set at the start of each term and agreed to by both parties, so there are no surprises. It can be a value representing the market value at the start of the term, or interpolated month-to-month using local home price indexes or automated valuation methodology. In Key’s model here are no bidding wars or blind offers, and none of the high costs and hassles associated with typical real estate transactions. If the resident does not exercise their option, the investor is free to list the home for sale on the open market at any value they wish.

What are the closing costs in the event of an exercised purchase option?

With an exercised purchase option, the resident has been living in the home for some time and the process is simplified with no need for agents, listings, staging or repairs. Key charges a flat fee to both parties for completing the purchase transaction. There may be situations where a realtor has referred the resident to the investor via Key. In these situations, a realtor commission may be payable by the investor upon closing, and the service agreement between Key and the investor will stipulate this up front and may adjust Key’s transaction fee to the investor.