Joint Tenancy vs. Tenants in Common: A Guide for Property Owners

When buying a home, there are many decisions to make, and one that often gets overlooked is whether you want to own property as joint tenants or tenants in common. This choice is important because it affects what happens to your share of the property if you pass away. Working with an experienced real estate lawyer can help you to understand these options and choose the best fit for your situation. Let’s take a look a deeper look into the definitions and what you need to know before deciding.

What Is Involved In Joint Tenancy?

Joint tenancy means that you and the other owner(s) share equal ownership of the entire property. The key feature of joint tenancy is the right of survivorship. If one owner passes away, their share automatically goes to the surviving joint tenant(s) – no need for a will or probate.

This setup is common among spouses or close family members who want the property to pass smoothly to the surviving owner without legal complications. For example, if you and your spouse own a home as joint tenants and you pass away, your spouse automatically becomes the sole owner. However, there may be tax and estate planning implications, which is why consulting a real estate lawyer before finalizing ownership decisions is essential.

What Is Meant By Tenants in Common?

With tenants in common, each person owns a specific share of the property, which can be equal or different percentages. Unlike joint tenancy, there is no right of survivorship. If one owner dies, their share goes to their heirs according to their will, or Ontario law if there is no will.

This option is popular among business partners or friends buying property together because it lets each person control what happens to their share after they pass away. Your lawyer can help you draft a co-ownership agreement to outline each person’s rights and responsibilities, preventing future disputes and doing so should be one of the first steps you take when buying a property with others.

Switching from Joint Tenancy to Tenants in Common

Sometimes, people who initially choose joint tenancy want to change it. This process is called severing the joint tenancy. One owner can do this on their own with no permission needed from the other owner(s). The best way to do this is by officially registering the change on the property title with the help of a real estate lawyer. Simply separating as a couple isn’t enough; you need to take clear legal steps.

Why would someone sever a joint tenancy? It’s especially important during a separation or divorce. If you don’t sever the joint tenancy, your share could automatically go to your ex-partner when you pass away, potentially derailing your estate plans. 

What If Joint Tenants Pass Away at the Same Time?

If two joint tenants pass on simultaneously, the joint tenancy is automatically converted to tenants in common. Each person’s share then passes to their respective heirs. Discussing these scenarios with your lawyer can help you plan for unexpected events like this and can guide you through your options along the way.

Selling a Property Owned as Tenants in Common

Owning a property as tenants in common doesn’t mean you’re stuck co-owning forever. Any owner can force the sale of their share at fair market value. This process involves legal steps, and having a lawyer ensures the sale is handled fairly and in compliance with Ontario laws. While co-owners can bid on the property, they don’t have special privileges like a right of first refusal.

Why Your Ownership Choice Matters

Choosing between joint tenancy and tenants in common is about more than just paperwork. It impacts your estate planning and how smoothly things go for your loved ones later on down the road. Because property ownership decisions can have long-term consequences, working with a lawyer with ample experience navigating real estate law in Ontario is essential. They can explain how each option affects your estate, taxes, and future plans so that you avoid unexpected surprises throughout your lifetime as a homeowner.

Need Help Deciding Whether to Hold Title As Joint Tenants Or Tenants In Common? Consult Our Seasoned Real Estate Lawyers

At Hukam Law our team has extensive knowledge and experience in real estate law to help you make an informed decision and draw up the proper documents to protect you and your family’s interests. Buying property is a big investment, and working with a legal professional ensures you understand your options and avoid costly mistakes. Contact us at 705-915-0884 or send an email to info@hukamlaw.ca to get started and know that when you have answers we’re a phone call away when you need us.

***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.