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Tuesday, July 6, 2010

What happens when a tenant-in-common dies?


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.

25 comments:

  1. My brother and I were left my parents' cottage upon their death. We are tenants in common. My brother wants me to buy his half. I cannot afford to do that and don't want to lose the cottage that my father spent 40 years building and which was his pride and joy! Can my brother make me sell the entire cottage so that he can claim his half of the money?

    ReplyDelete
  2. Some investors in Tenant in Common TIC commercial property investments have found that they are now always as promised. If you have invested in a TIC, and now are not receiving distribution payments, have tenants that are not paying rent, have bad property management, or are facing cash calls or foreclosure, please contact my law office for a consultation. Some people can recover money for tenant in common investments sold in violation of securities laws, or with material omissions and misrepresentations, or without proper due diligence done on the property.
    Best,
    The Law Office of Daniel Bakondi, APLC
    danielbakondi@yahoo.com

    http://www.danielbakondi.com/Tenant-in-common-investment-tic-property.htm

    ReplyDelete
  3. I haven't dealt with this lawyer whose contact info appears in the previous comment, so I can't vouch for him personally. But I've been hoping to find more resources to do with problems with property, so I'm posting his info in case he is able to help any of my readers. Let me know!

    Lynne

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  4. Dear Lynne

    I have just been advised there is a good possibility that my estranged boyfriend may have sold his half of our house to his sister to avoid having any assets. (we have the TIC arrangment)

    Can he do this without my knowledge?

    thank you

    ReplyDelete
  5. Yes, a tenant in common can dispose of his/her share without the consent or knowledge of the other tenant(s) in common. Now keep in mind, I don't know the bigger picture. The fact that you've said he is avoiding having any assets makes me think there is more going on. A general statement as I've given in my answer here is just that - a general statement. If you're involved in other issues, hire a lawyer and tell him/her the whole story.

    Lynne

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  6. my husband recently passed away and his youngest son thinks all of his fathers belongings now belong to the estate. He wants to take furnishings and other stuff out of our matrimonial home. What is the legal definition of "estate"? Is my stepson entitled to take whatever was his fathers?

    ReplyDelete
  7. My husband and I are Tenants in Common on a recreational property.

    Although we have been together for 20 years, my husband will not show me his will (he has 3 children from a previous marriage) He indicates that he wants to will his half of the property which is totally acceptable. A lawyer told me that there could be a risk that his will could override my 50% ownership of the property as it is not joint tenancy so there are additional risks with TIC and ownership does nto have survivorability. Do you have any knowledge of this happening in previous cases....?

    ReplyDelete
  8. Hi,
    No I don't know of any cases like that. Your husband, as a tenant in common, can't do anything with your half of the property that you don't agree with.

    The survivorship the lawyer was talking about is the right of survivorship that is part of joint tenancy. Where there is a right of survivorship, the last joint owner alive gets to keep the property. You're in a different situation because you own your half outright.

    So while I believe your legal title is safe, please think about this situation in a practical way. What if your husband dies, leaving his half of the property to the three kids. Do you really want to share a house title with them?

    Lynne

    ReplyDelete
  9. Hello Lynne, thank you for the informative blog. I have been reading it on and off since my grandmother passed away in March of 2011.

    My mother, uncle and aunt are 1/3 beneficiaries of the estate, and the house my grandmother shared with her partner was owned tenants-in-common, with each of them getting 1/3.

    The estate lawyer is telling my mother that my grandmothers name will continue on the deed until such time as her partner dies or sells. This could be years, and my mother is worried that something fishy is going on here.

    My question is, can a dead person own property? It was my belief that the 50% of the deed would transfer to the beneficiaries names, alongside the partners 50%.

    thanks again

    ReplyDelete
  10. Hi Gabriel,

    No, a dead person can't own property, but his or her estate can. When someone owns property there are two separate steps that are taken to give or sell that property to another person.

    Step one takes the property out of the name of the deceased and puts it into the name of the estate. That first step is called transmission.

    Step two takes the property out of the name of the estate and puts into the name of the person(s) buying or receiving the property. That second step is called transfer.

    Perhaps what the lawyer actually means is that your grandmother's half of the property is going to be kept in the name of her estate.

    The interesting question to me is WHY her name is being kept on the title. As a tenant-in-common, she could dispose of her half on her death regardless of what her partner was doing with his or her half.

    So why would it be happening this way? I would first look at the will. Perhaps your grandmother specified in her will that her half be held in trust until her partner sold his half or died. This would not be unusual, as many people try to make sure that their partner won't lose the roof over their head.

    Your mom and the other beneficiaries should ask for clarification of exactly what is being left to them, and under what circumstances they are to receive it. I strongly suspect the will has more in it than they know about so far.

    Lynne

    ReplyDelete
  11. If a widower with adult children (living elsewhere) remarries, what is the spouse's rights if her name is not on house title, and house is willed to his children? Is it legal for widower to add a trust in will indicating spouse has right to continue living in home for next 5 years? Is that the extent of her rights as surviving spouse?

    ReplyDelete
  12. do tenants in common have to protect their interest as a restriction if the land is registered?
    also if i want someone else to have my share for examplw trustees to hold on for a beneficiary will my trustees name be on the land resgistry documents?

    ReplyDelete
  13. I am married for just over 6 yrs to a widower whose four adult children no longer live in his house. His name is on title, mine is not. someone suggested he could include a line in his will that says I can stay in his house for up to 2 years after he's gone...Is this legal? Would i have the right to stay in the house that long, or at all? Does it matter if house is willed to each of his children, or if he wills house to be sold and proceeds divided equally between them? Can his children throw me out (his daughter might try).
    thank you for any assistance.

    ReplyDelete
  14. I currently have a 1/8 ownership in a property that is in a tenants in common ownership structure. One of the owners owns half of the property. Can I sell my share in the property to the majority owner without having to offer it to the other owners or have consent?

    ReplyDelete
  15. Can there be a TIC beneficiary named anywhere else other than a will? My ex died intestate leaving a house and TIC recreation property. My son (decease's only child) was under the understanding that his grandmother was named beneficiary of the TIC property but we don't know where to find that information. He discovered his father never finalized his divorce (2nd wife) from 10 years ago. She is now claiming the estate is hers even though she was paid in full 10 years ago and signed that she has no claim to the property.

    ReplyDelete
    Replies
    1. Hi Sharon,
      Wow, this sounds like a bit of a mess. The only place the TIC beneficiary could be named is in the will. When your ex said he meant to name the grandmother he must have meant he was thinking of making a will. You didn't say who the other tenant(s) in common are on the property so I can't conclude anything from that. It sounds as if the 2nd wife is relying on the strict letter of the law that says a wife is entitled to be supported financially by the estate of a deceased spouse. You said that she "signed that she has no claim to the property" but that can mean a couple of things. Simply receiving what is given isn't necessarily considered making a claim. But that is something a judge can decide with all of the facts at hand, including the fact that 10 years have gone by since the woman was actually his financial dependent. I guess everyone is wishing your ex had finished his estate planning but he's one of a huge majority of people who just never get around to it.

      Lynne

      Delete
  16. Hi Lynne, Thank you for this blog, its really helpful to me.
    I am signing a parcel of land which I inherited from my father,over to my son and daughter. Can I write up a letter of transferal and have it notarized by a justice of peace, or do I need to have a lawyer handle it?
    Should the transferal be under "tenants in common?

    ReplyDelete
    Replies
    1. Hi. You're welcome, and thanks for reading :)

      You don't necessarily have to have a lawyer to take care of a land transfer, in the sense that you can do it legally on your own. A letter of transferral, notarized or not, is not going to work. You have to use the proper transfer form provided by the land titles registry. You can either get that by going in person to the local land registry, or by going online to see if your province has a manual posted. In the "links" section of my blog, I've linked to the online manuals that I know about.

      A valuable reason to use a lawyer is to talk through the reasons for the transfer, and come up with any alternatives that might meet your goals. If you and I sat down to talk about this idea, I would express to you in strongest terms my reservations about putting both kids' names on the title. In my experience, asking two different people with different lives and different agendas to use one property is naïve. It usually turns out to be a punishment for the children, believe me.

      A lawyer might come up with other ideas, such as leaving the property to one child and equalizing the other with other assets or life insurance.

      In other words, the lawyer brings more to the table than knowing which form to use. Please think this transfer through, and talk to both of your kids (maybe they don't even want the land) before going ahead.

      Lynne

      Delete
  17. Hi Lynne,
    Regarding TIC with right to survivorship where the agreement is the survivor has right to exclusive use and is responsible for all household expenses and maintenance of the property. When the surviving occupant passes, is there a grace period for the occupant’s estate to deal with personal belongings and getting the estate in order before the carrying costs of the home are split between all owners or are all owners responsible as of the date of death? At what point do all owners have right to access the property?
    Jane?

    ReplyDelete
  18. what if there is no will for TIC and the property is not paid off yet. what then do I pay it off alone and the next of kin get the property once I pay it off..

    ReplyDelete
    Replies
    1. Perhaps. There are facts missing here. I assume that you are the other TIC. Did you and the deceased have separate financing arrangements? If you had a joint mortgage, then yes you have to pay it off. If you didn't have a joint mortgage, then you don't have to pay it off.

      If the deceased didn't have a will, then someone has to apply to the court to become the administrator of his estate. Who that should be is the subject of another post.

      The job of the administrator will be to use estate assets to pay the debts first. Hopefully there is enough in the estate to cover the remainder of the deceased's mortgage.

      Once the mortgage is paid off, the administrator will transfer the title that belonged to the deceased to his beneficiaries. Therefore you will be sharing the title of the house with someone in his family. Normally the house of the deceased is sold, but in this case you own half of it, so it's unlikely to be sold unless you choose to buy it.

      As I always remind people when they buy property, it's so easy to set things up, but so damn hard to get out of the arrangements when someone passes away.

      Lynne

      Delete
  19. Hi Lynn:

    My dad, my brother and I were on title as tenants in common.

    My dad passed away, leaving his share to my mom.

    I am the executrix and I probated his will.

    Today I applied with the LTO for the first transfer i.e. from the deceased to the Executrix of the Estate.

    I understand the second transfer should be from the Executrix of the Estate to the beneficiary i.e. my mom.

    In order to avoid future probate fees, we all want joint tenancy on the title.

    My question is:

    On the form A, can I put the following:

    Transferors - 1/3rd interest, because we were tenants in common in the first place:

    1) Myself, as the Executrix of the Estate
    2) My brother and
    3) Myself

    Transferees: AS JOINT TENANTS

    1) My mother
    2) My brother and his wife as joint tenants, and
    3) Myself

    THE ABOVE 3 AS JOINT TENANTS?

    # 2: My brother and his wife are joint tenants because if my brother dies, his wife can get his share automatically and we do not need to obtain a probate.

    The reason we want to do joint tenancy is to avoid an additional form A and $ 79.22 fees that we will need to pay if we first transfer from my dad's Estate to my mom AND then transfer from all 3 tenants in common to all 3 as joint tenants.

    Please let me know if what I am thinking is possible or not.

    Also, I understand that I will still be required to fill the yellow form FIN595S to transfer 1/3rd share from estate to my mom and pay no property tax as it is exempted (code 40) for transfer between the executrix to the beneficiary who is a related individual.

    Are there any notaries, solicitors or officers who can notarize the signature without any fees?

    ReplyDelete
  20. Hi Lynn,

    Is there any way you can search if someone is tenants in common or joint tenancy. My Grandparents & Aunt lived in the same house. I was told it was a 50/50 split. My grandfather passed away 9 years ago, and my father passed away 5 years ago. I do not have contact will my family but my grandmother is still alive. This being said I know on the will the half of the house was divided into thirds ( my father, & his two sisters) My mother is also listed next to my fathers name on the will. This maybe confusing but I'm just trying to see the situation for what it is.

    ReplyDelete
    Replies
    1. Certainly. Go down to the local Land Titles Office or Registry and search the title. You can do this online in most places. The easiest way to search a title is using the legal description, i.e. plan number, block number, lot number. If you don't know those, you can get them by contacting the municipal tax department with the street address and asking for the legal description. Again, it might also be possible for you to find that information online.

      Lynne

      Delete

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