Home Ownership – What’s in a Title?

Becoming a homeowner is an exciting time, but there are many questions that arise during the process of purchasing a home. One important question is in regards to the way you wish to register title to the property (title means ownership). There are various ways to register title of property in Ontario, and the chosen method can have an impact on your estate plan.  Here are some of the most common ways of registering title to property in Ontario:

Sole Ownership

Sole ownership is when the property is purchased by one person in their name. The sole owner has complete control when it comes to selling, transferring, or mortgaging the property, subject to any rights of a married spouse under the Family Law Act. When the sole owner dies, the property passes to his/her estate and is dealt with in accordance with the Will or under the intestacy rules if the sole owner dies without a Will.

Co-ownership

Co-ownership is when the property is purchased by two or more persons. The two most common forms of co-ownership are (1) joint tenants or (2) tenants in common.

Joint Tenants

Owning property as joint tenants means owning property together in equal shares. In other words, the joint tenants have an equal interest in and equal responsibility for the property.

Under this method of co-ownership, the property cannot be transferred, sold, or mortgaged without the consent of the other joint tenant(s). This method of co-ownership is common among spouses.

When one joint tenant dies, the surviving joint tenant automatically inherits the property by right of survivorship. This means the property does not pass to the deceased’s estate, so it is not governed by the deceased’s Will or the intestacy rules (on a death without a Will).

Example: John and Jane are married and buy a home together as joint tenants. John dies. Jane becomes the sole owner of the home by right of survivorship. Jane can register a Survivorship Application to remove John’s name from title.

Tenants in Common

Owning property as tenants in common means owning property together based on an allocated percentage share, which does not have to be equal among the owners (but must equal 100%). The percentage share is set out in the Transfer/Deed. Under this method of co-ownership, the property can be transferred and sold without the consent of the other tenants in common. This method of co-ownership is common for investment properties.

When one tenant in common dies, their share is dealt with through their estate and is governed under their Will or the intestacy rules (on a death without a Will). The deceased’s share does not pass to the other tenants in common by right of survivorship.  

Example: John, Jane, and Adam are friends and buy a home together as tenants in common. John takes a 25% share, Jane takes a 30% share, and Adam takes a 45% share in the home. John dies. John’s 25% share goes to his estate and will be dealt in in accordance with John’s Will or under the rules of intestacy if he died without a Will. Jane and Adam’s shares remain the same at 30% and 45%.

The method of ownership that is best for you is dependent on your situation and can form an important part of your estate plan. Accordingly, you should have a discussion with your real estate lawyer when purchasing a home to determine what method of property ownership is best for you.

If you have questions about your methods of home ownership or title decisions, contact the experts at Brown Beattie O’Donovan — we’ll help guide you through your options.