Property Titles & Home Ownership

Did you know there are several types of property ownership in Canada? When you’re buying a new home, some terms can be confusing, especially when encountering unfamiliar ones related to property ownership or property titles. It’s essential to understand the different types of property ownership — such as freehold, leasehold, co-ownership, joint tenancy, tenancy in common, and in-trust partnership — before making a purchase because this title needs to be outlined in your legal purchase documentation as well as on the deed. 

But, first let’s simplify a couple of terms: property ownership and property title.

Property ownership as mentioned above refers to the legal right to possess or use and enjoy the property. Property title, on the other hand, refers to the legal document that proves ownership of the property. So, although they are closely related they are two different concepts to understand. 

Each type of property ownership which would be listed in the property title has its own set of advantages and disadvantages. To ensure you make the best choice for your situation, it’s advisable to consult with a real estate lawyer. Your lawyer will also walk you through the legal implications of each type of ownership and will make sure it’s noted accurately throughout all your paperwork when purchasing a property to ensure you don’t run into ownership issues later on.

What Are The Types of Property Ownership in Canada?

Real estate can be owned by single or multiple individuals or entities, and the process is known as “taking the title on a purchase”. In Canada, both individuals and corporations can hold title to a property and here we have outlined a basic summary of the different ownership options. However, if you have questions, your professional legal team at Hukam Law is only a phone call or email away to get you the answers you are seeking.

Individual Ownership Options Of A Property

Registered ownership in real estate means that the name listed on the title deed is recognized as the property’s owner. In the event of a dispute, the name on the title deed is what determines the official owner of the property.

Freehold is one of the most common types of home ownership in Canada, offering the most freedom since you own both the property and the land it sits on. Most single-family homes are sold as freeholds. As the owner, you are responsible for maintaining the property, its buildings, and the land.

Leasehold is when you purchase a leasehold property, you own the building but not the land it occupies. These properties are often situated on Native Canadian lands or Crown lands, with leases typically lasting 99 years and subject to renegotiation. Land lease properties are also popular in senior and family communities. Leasehold properties generally have a lower value compared to freeholds and obtaining a mortgage for them can be more complex. Additionally, it’s important to note that leasehold properties tend to depreciate as the lease term nears its end.

Co-ownership Options Of A Property

Another form of real estate ownership is co-ownership, where multiple individuals agree to purchase a property together. Co-ownership can be formal, such as buying into a co-operative, or informal, such as buying with friends or family.

In a co-operative, each party owns a share of the corporation that holds the property. In a co-ownership arrangement, two or more individuals, often family members or friends, enter into a legal agreement to jointly own a property. There are two types of tenancy in this scenario: joint tenancy and tenancy in common.

Option 1: Joint Tenants. 

In this type of home ownership, each party holds an equal share of the property. This arrangement is common when spouses or partners buy a property together. Upon the death of one partner, ownership is automatically transferred to the surviving partner without the need for probate.

Option 2: Tenants in Common. 

In this type of co-ownership, each owner holds an undivided share of the property and can choose to pass their share on to heirs. This arrangement allows each owner to sell or transfer their share without needing the consent of the others. Ownership interests can vary in size, and each owner is responsible for their own taxes and maintenance costs.

In-Trust Property Ownership

In an in-trust ownership arrangement, one party holds the legal title to the property on behalf of another party. The trustee acts as the owner of the property for the benefit of the beneficiary. Responsibilities of the trustee include managing the property according to the terms outlined in the trust agreement. This may involve managing the property for the beneficiary’s benefit, investing funds, and distributing income or capital to the beneficiary.

Partnership Agreement

A real estate partnership agreement is a legal document outlining the expectations, obligations, and rights of all parties involved in the partnership. It details the specific terms agreed upon by the owners regarding the purchase and management of the property, and it establishes protocols for resolving any potential disputes that may arise.

Deciding Which Type Of Property Ownership Is Right For You

Choosing the most suitable type of home ownership can pose a challenge and seeking the advice of an experienced real estate lawyer is crucial to avoid mistakes. Before making a real estate purchase you’ll want to conduct thorough research on various forms of real estate ownership, assessing their respective advantages and disadvantages especially if the property you are purchasing is an investment property. And, before stepping into any partnership or agreement involving multiple people consider factors such as costs, legal obligations, maintenance needs, tax implications, and more. Consult with a local real estate lawyer so that they can offer you further insights and assistance throughout the process. Making smart financial decisions can have a lasting, positive impression on your investment and your financial well-being.. 

An Experienced Real Estate Lawyer Can Help You Understand The Right Property Ownership Type For Your Specific Situation

Each type of home ownership available in Canada presents distinct advantages and drawbacks. Ultimately, the choice of the right home ownership type for you will hinge on your individual requirements and financial circumstances. Take the necessary time to conduct thorough research and seek guidance from a trusted real estate lawyer along the way. 

At Hukam Law, we have the expertise you need to help you evaluate your property ownership options and can take care of title searches, legal due diligence, and more to assist you. Whether you’re looking for a new home or want to change the type of ownership you currently have on the title, we’re here to guide you through the options and legal requirements with ease. Reach out to us at 📞 705-915-0884 or via email at info@hukamlaw.ca. 

***The information provided in this blog is for general informational purposes only and should not be construed as legal advice. If you have legal questions, we strongly advise you to contact us.