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There are two common ways to take title to property when two or more people are involved in the transaction. They include joint tenancy and tenancy in common.
1. Joint tenancy involves ownership by two or more persons of the same property, all of whom hold title to the property and share equal ownership of the property.
2. Tenancy in common is a relationship in which each of the tenants involved has a separate and divisible interest in the property, which may or may not be equal.
As a real estate agent it is important to be aware of the various considerations that must be made when facing a situation in which there is a joint tenancy or tenancy in common relationship, specifically in situations where one of the tenants passes away.
Where there is a joint tenancy, the surviving joint tenant is automatically entitled to obtain title to the property, and therefore, entitled to sell the property to someone else without any personal representatives of the deceased intervening with the transaction. This key characteristic of joint tenancy is referred to as the ‘right of survivorship,’ which means that the full interest in title to a property will transfer over to the surviving joint tenant upon death of the other joint tenant. When acting as the real estate agent for the buyer, and purchasing a property from the surviving joint tenant, it is important to ensure that the seller provides and registers a proof of death certificate on title to the property.
Unlike joint tenancy, a tenancy in common relationship does not have the same ‘right of survivorship’ implications. In this type of ownership relationship, when one individual dies, the death operates to sever the relationship. This means that each party involved would only retain their share of the property in question, and the deceased persons share would be transferred to whomever the deceased had previously determined would be entitled to it, often dealt with by way of a will and if there is no will, then the rules set out under the Succession Law Reform Act, R. S. O. 1990, c. S.26 will be applied.