There are a number of options to take title in land in Ontario. The following is a list of the most common ways that homeowners will choose to register ownership in their residential property.
In this form of ownership, there is only one person holding title. As a sole owner, the property owner would have sole decision making power with respect to the property. When the sole owner dies, the property would be distributed according to the sole owner’s will. If the sole owner does not have a will, then the property will be distributed according to the rules of intestacy. In general terms, this means the property will be distributed to the sole owner’s next of kin at the time he or she dies.
If the sole owner is a legally married spouse, not a common law spouse, there are family law obligations that should be considered. It does not matter whether the sole owner was married at the time the property was purchased or the sole owner later married. Family law legislation in Ontario limits a married sole owner’s ability to unilaterally mortgage or transfer the property if it is considered to be a matrimonial home. If this situation applies to you, you may need to seek professional advice before attempting to transfer a matrimonial home.
Property may also be held by more than one owner. The two most common types of co-ownership are joint tenancy and tenancy in common. The rights and responsibilities of the co-owners will differ depending on the type of co-ownership, set out below. Homebuyers considering taking title as co-owners may also want to enter into a separate agreement setting out the specific rights and responsibilities of the co-owners as it relates to their specific circumstances.
In this form of co-ownership, two or more individuals hold property together and are known as joint tenants. Each joint tenant has an equal interest in the property and equal obligation to maintain the property. Joint tenants cannot transfer the property without the consent of the other joint tenant(s). If one or more joint tenants want to transfer the property and one or more of the joint tenants do not, an application may be made to the court to attempt to force the sale of the property.
When a joint tenant dies, the remaining joint tenant(s) receive the deceased joint tenant’s share of the property by the right of survivorship. Property that is held in joint tenancy is not subject to disposition by will.
Tenancy in Common
In this form of co-ownership, two or more individuals hold title to the property in shares that may or may not be equal. The percentage of ownership of each tenant in common should be set out in the deed. Each tenant in common holds a share of the property and is only entitled to receive the income from the property in proportion to his or her share. Each tenant in common is also required to contribute to his or her share of the expenses in proportion to his or her ownership interest in the property.
Tenants in common are able to transfer their shares in the property without the consent of the other tenants in common. There is also no right of survivorship for tenants in common. When a tenant in common dies, his or her share in the property would pass by the deceased’s will or by the rules of intestacy (if there is no will).
When purchasing a property, you should spend some time thinking about how the title to the property should be held. Consult your real estate lawyer to ensure that the form of ownership best meets your needs.