In this blog, I've mentioned a few times (and will mention many more times, I'm sure) what happens when a joint owner of property dies. However, I was recently asked what happens when a tenant-in-common dies.
A major difference between joint owners and tenants-in-common is that joint owners automatically have a right of survivorship to the entire property. Even though there are two or more joint owners, they are all considered owners of the entire property, as opposed to a half or a third. There are no halves or thirds with joint owners.
With tenants-in-common there ARE halves and thirds (and other portions). Each person owns only a portion of the property, according to the Transfer of Land document that was filed with the Land Titles Office when they acquired the property. There is no right of survivorship with tenants-in-common because each owner owns his or her section only.
It's possible for two people to be joint tenants of one portion of a tenancy-in-common.
When a tenant-in-common dies, his or her portion of the land is dealt with like any other asset that is in that person's name alone. Hopefully the person has a Will which sets out who will get his or her property. If not, there will be an administrator appointed by the court. Whoever is the beneficiary of the estate will become the new owner of the deceased's portion of the property. The portions of the property owned by the other tenants-in-common are not directly affected.
When deciding whether you want to own property as joint owners or tenants-in-common, or whether you want to own real estate together with other people at all, you really do have to think through the likely scenarios you might encounter. For example, if you own 1/3 of a house as a tenant-in-common and you want to sell your share, how do you get out of the arrangement? How do you sell 1/3 of a house? Are the other tenants-in-common in a position to buy you out?
If a new owner does join the tenancy-in-common because he or she has inherited someone's portion, how will the other owners interact with that person? Will they be able to agree on issues such as whether it should be sold, who should live in the house, etc?
There are pluses and minuses for different possible arrangements, and each comes with its own set of owner's rights. When I ask clients about their ownership arrangements, the vast majority say that they don't know whether they are joint owners or tenants-in-common. You should make sure that you thoroughly understand your own situation.
A major difference between joint owners and tenants-in-common is that joint owners automatically have a right of survivorship to the entire property. Even though there are two or more joint owners, they are all considered owners of the entire property, as opposed to a half or a third. There are no halves or thirds with joint owners.
With tenants-in-common there ARE halves and thirds (and other portions). Each person owns only a portion of the property, according to the Transfer of Land document that was filed with the Land Titles Office when they acquired the property. There is no right of survivorship with tenants-in-common because each owner owns his or her section only.
It's possible for two people to be joint tenants of one portion of a tenancy-in-common.
When a tenant-in-common dies, his or her portion of the land is dealt with like any other asset that is in that person's name alone. Hopefully the person has a Will which sets out who will get his or her property. If not, there will be an administrator appointed by the court. Whoever is the beneficiary of the estate will become the new owner of the deceased's portion of the property. The portions of the property owned by the other tenants-in-common are not directly affected.
When deciding whether you want to own property as joint owners or tenants-in-common, or whether you want to own real estate together with other people at all, you really do have to think through the likely scenarios you might encounter. For example, if you own 1/3 of a house as a tenant-in-common and you want to sell your share, how do you get out of the arrangement? How do you sell 1/3 of a house? Are the other tenants-in-common in a position to buy you out?
If a new owner does join the tenancy-in-common because he or she has inherited someone's portion, how will the other owners interact with that person? Will they be able to agree on issues such as whether it should be sold, who should live in the house, etc?
There are pluses and minuses for different possible arrangements, and each comes with its own set of owner's rights. When I ask clients about their ownership arrangements, the vast majority say that they don't know whether they are joint owners or tenants-in-common. You should make sure that you thoroughly understand your own situation.
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