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Thursday, January 30, 2014

Joint owners vs. tenants in common, take 2

This post is an update of a post I made originally in January, 2010. That post has so many comments on it that the blog system will no longer allow me to read or respond to them. As a result, many people are leaving comments that go unanswered. I decided to re-post the article so that I can see any new comments. In addition, I updated some information. Thanks for reading!

When talking to clients about estate planning, I always ask them about the title to their homes, cottages and revenue properties. The majority of people will respond with the names of the people who are "on title". However, when I ask whether the people on title are on as joint tenants or as tenants-in-common, they usually don't know. I'm often then asked, "does it make a difference?"

The short answer is yes, it makes a difference.

When a property is held in joint tenancy, the situation is what I refer to as "the last man standing". When one joint tenant dies, the entire property belongs to the remaining, surviving joint tenant(s). Whoever is the last joint tenant to die owns the property. Only that last person can use his or her Will to give the property to someone else.

For example, let's say Robert, Dean and Chris are joint tenants of a house. Dean passes away. Even though Dean would like to leave his share to his wife, he can't because he's a joint tenant. Robert and Chris then own the property. Robert dies. Chris now owns the whole property. Because Chris is the only name on title now, he can leave the property to his wife and children. There is nothing for Dean or Robert's families.

Tenants-in-common is a different story. In this arrangement, each person owns a half, or third, or some other portion that belongs only to them. They can leave their share to someone in their Will or sell it (never mind the logistical problems of trying to sell one third of a house).

To adapt our example above, let's say Robert, Dean and Chris are tenants-in-common of the property and each owns and equal 1/3. When Dean passes away, he leaves his share to his wife, Deana. Now the owners are Robert, Deana and Chris. Then Robert passes away and leaves his shares to his wife, Roberta. Now the owners are Deana, Roberta and Chris. In this way, each of the individual owners retains control of his or her share.

Between a husband and wife, a title is almost always held as joint tenants. This is so that when the first spouse dies, the other one will automatically own the family home without having to go through probate. Note that this is not always done in second marriages, depending on the situation.

The subject of names on title comes up at estate planning time because the type of ownership might affect your estate plan.

It also comes up in estate administration, because joint ownership between a parent and a child is no longer automatically assumed to be an arrangement whereby the surviving child owns the property. Inter-generational joint ownership is subject to analysis by the courts regarding whether the parent actually intended the arrangement to be a true joint ownership arrangement.


  1. Does the tenancy set in the marriage contract ( it stays that future purchases are set as tenants in common ) overrides the mistake we made buying the property as joint tenants . We bought the house as tenants in common . Later we bought the land as joint tenants. Which one would prevail in case one of us dies. This is the second marriage for both of us and we have children from first marriages.

    1. I don't know how you can buy a house and not the land, then buy the land later? Interesting dilemna.

  2. In 2007 my dad approached me with the idea of buying a house together, as we both lived in condos. He was lonely after my mom died and I was making a big daily and nightly commute into the city to work and then to take my daughter to nightly soccer. It seemed like a good solution that would also enable me to cook supper for dad and be there evenings and weekends (after work) as his health was a bit 'iffy' a the time. We agreed to do this. My condo sold very fast, while his didn't sell before we moved into our house together so he re-financed. I rolled the mortgage from my condo ($102,000) over into the house we bought together ($394,000). I also contributed $126,350 in cash to the new house. Dad contributed $167,000. The three of us lived very happily together in the house (my dad, my youngest daughter and I) for 16 months. Dad was quite ill for the last few months at the house and after heart surgery, I couldn't bring him home to the house as he couldn't handle the stairs and as a very little, old house, it would have required thousands of dollars in remodelling to accommodate his needs. As his condo hadn't sold in the 18 months that it had been up for sale, we agreed to move him back to his condo as it was on one level and had the right kind of bathroom, etc. that he needed. I took him home from one of many hospital stays to his condo just before xmas, 2008. For the next two years dad was very, very ill. He died in Dec. 2010. My daughter and I still lived in the house my dad and I had purchased together (as joint tenants), when he died. For the entire time we owned the house, I made all the mortgage and property tax payments. In the 5 years of owning that house, I paid down the mortgage from $102,000 to $81,000. Right after my dad died, my sister (lives in Victoria, in a hospital - has MS) started asking about the house and "dad's share of it." After dad died I did the paperwork required re Right of Survivorship. In October, 2012 I sold the house and rolled my mortgage from the house over into a new mortgage on a condo I bought. Last May (2013) my sister sued me for $ from the house. She and her lawyer argue that the house dad and I bought and lived in together (and that I had consideration and equity in, from the start) was part of my dad's estate. The last time my dad did anything to his Will was 1999 so he never said anything in his Will about the house that we bought together. His Will made provision for the residue of the estate to be paid to my sister and I in equal shares. My belief is that, as there was never a "transfer" of property involved in our joint tenancy; and that the joint tenancy agreement we had in this house was never an "estate planning tool"; it was a lifestyle decision and choice initiated by my dad over three years before he died; we lived in the house together for as long as his health permitted; I made a significant cash contribution to the house, and rolled over my existing mortgage to buy the house and then for the entire 5 years of ownership, paid the mortgage and taxes; that this house was NOT part of my dad's estate. BUT, between the four years I owned and made mortgage payments on the condo I sold to move into the house with dad, and the subsequent 5 years of mortgage payments on our house and now, the last 1.5 years in my present home, I DO consider my home (complete with over ten years of home ownership and mortgage payments) to be part of MY estate, to be shared among my three children and NOT with my "loving" sister.

  3. Sorry, I just published my comment re a house my dad and I purchased and lived in together as joint tenants and that my sister is suing me regarding, and realized that I didn't ask "the big question" and that is...What is your view of this matter, Lynne? My lawyer refuses to make any of the arguments that I noted in my comment, on my behalf and she just keeps asking me - between billings - if I want to "settle." I'm a single, full-time working mother and have been for the past nearly 18 years. I'm 52 and my home is basically my only source of equity. I have had to take on a 2nd job just to pay my lawyer to "defend" me in this lawsuit initiated by my sweet sister so as you can imagine, NO, I do not want to and I simply CAN'T "make an offer" as everyone seems to be asking me to do (my sister, her lawyer and really, my own lawyer)!!

    I appreciate your view if this, Lynne. Many thanks.

  4. When does joint ownership fail to exist when the will has been misplaced. A mother gives a down payment of a third and expects it to grow in value despite the financial crisis that have happened over the past 15 years.
    If the deceased has paid all the property taxes and mortgage payments for the past 15 years..How does a best friend find the will in Ontario.
    Especially since there are still young adults.


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