Joint tenancy and tenancy in common조인트 테넌시 / 테넌시 인 커먼

What is it?

When two or more people own one home together, Ontario gives them two ways to do it: joint tenancy and tenancy in common. The choice is written in the transfer (the registered document that moves ownership) and stays on title.

The big difference is what happens when one owner dies. Joint tenants have a right of survivorship: the share of the owner who died passes automatically to the surviving owner(s), no matter what their will says. Tenants in common each hold their own share (for example 50/50 or 70/30), and a share of an owner who died goes into that person’s estate and passes under their will or the inheritance rules.

The word “tenancy” has nothing to do with renting here. It is just the legal name for a way of owning.

Side by side

Which one fits depends on your family situation and taxes. Decide with a lawyer before closing.

What does the law assume?

Section 13 of Ontario’s Conveyancing and Law of Property Act says that when land is transferred to two or more people, they take it as tenants in common unless the document clearly shows they are to be joint tenants. This applies even when the owners are spouses (section 13(2)).

So if you want joint tenancy, the transfer must say “as joint tenants”. This is why your lawyer asks you how you want to hold title before closing.

How it is chosen, and how it is changed

1. After your offer is accepted, your lawyer asks the buyers whose names go on title and how they will hold it.
2. The lawyer writes the owners’ names and the form of ownership (joint tenants, or tenants in common with the shares) into the transfer and registers it on closing day.
3. From then on the form of ownership appears in the parcel register. Anyone doing a title search can see it.
4. To change it later (for example, from joint tenancy to tenancy in common) you need a new registered document. Because one owner transferring their own share can break a joint tenancy, always do this with a lawyer.

Which one fits whom?

• Married couples: joint tenancy is the common choice. When one spouse dies, the home passes automatically to the other, and the home does not go through probate (the court process that confirms the estate trustee).
• Friends or investment partners: when people put in different amounts, tenancy in common with set shares is common. A separate co-ownership agreement that sets out who pays what and what happens when one person wants to sell is a good safeguard.
• Blended families: if you want your share to go to your own children, tenancy in common may be the better fit, because joint tenancy sends the share to the surviving owner first.
• Parents and adult children: some parents add a child to title as a joint tenant. This can raise gift, tax and creditor issues. Ask a lawyer and an accountant first.

When one owner dies

Joint tenancy: the surviving owner applies with proof of death and the evidence the land registry requires, and the land registrar deletes the name of the owner who died (Land Titles Act, section 123). The Ontario government’s guidance says jointly owned assets that automatically become the other owner’s are not included in the estate value used for Estate Administration Tax.

Tenancy in common: the share of the owner who died is part of their estate. Ontario’s guidance says an estate normally must be probated if it includes real property that does not pass by right of survivorship. The estate trustee must get the certificate of appointment and be entered on title before the share can be sold or transferred.

One exception: under section 26(1) of the Family Law Act, if a spouse dies owning a matrimonial home in joint tenancy with someone other than their spouse, the joint tenancy is treated as severed just before death. The share does not pass automatically to the third person; it goes into the estate.

What to watch out for

• Joint tenancy is not a substitute for a will. Other assets still need a will, and situations such as both owners dying together should be discussed with a lawyer in advance.
• A joint tenancy can be severed when one owner transfers their share (to someone else or to themselves). It then becomes a tenancy in common. This can happen without the other owner knowing when a relationship breaks down, so ask a lawyer.
• One owner’s debts can affect that owner’s share. Putting someone on title also means sharing responsibility.
• Co-ownership affects taxes (capital gains, the principal residence exemption, land transfer tax). Check the numbers with an accountant.
• If the home is a matrimonial home (a married couple’s family home), separate spousal consent rules apply regardless of whose name is on title.

Example