Hello everyone, this is Paul Choi from the Juris Notary office. Continuing from the previous column, where we discussed about joint tenancy and tenant in common, I would like to discuss in more details about the pros and cons about the right of survivorship that comes with owning a property as a joint tenant.
There are many aspects to consider when deciding which tenancy to obtain the title and may be different for your individual situation. Please call our office at 604-416-0211 for consultation on your specific case.
When you purchase a property with another person, each individual owns a share or interest of the entire property; as in, you do not own a specific area of the home, but you own it shared as a whole. Although joint tenancy and tenancy in common has many similarities, there are also important differences that we will discuss here.
Tenancy in common
When you own a property as a tenant in common, you may own a different amount of interest in a property. For example, one person may own 70% and the other own 30%. Also, you can obtain a share or interest on a property at different times. This means that one person may own some portion in 2016 and another person can buy into the property in 2018. Additionally, for estate purposes, if an owner passes away, that person’s share is transferred to a beneficiary designed in his/her will or to a person(s) entitled to under the Wills, Estates and Succession Act. For this reason, tenancy in common is often favored when purchasing a property for an investment purpose.
Joint tenancy
Contrary to the tenancy in common, joint tenants must obtain equal shares of the property, at the same time with the same deed. It is important that if you want to obtain a property as joint tenants, you should advise your lawyer or notary representing you for the transaction. In the province of BC, if the word “joint-tenants” does not appear on your deed, it defaults to a tenancy in common.
It is also worth noting that the joint-tenancy can be broken if one of the owner transfers or sells his or her share to another person, or even back to him or herself – this can be done without other owner’s consent.
One of the most prominent benefit of owning a property in joint tenancy with another person is that it grants a right of survivorship. Right of survivorship allows a surviving owner(s) to automatically transfer a deceased owner’s interest in a property. For example, if you own a property as joint tenant with your spouse and one of you passes away, the surviving owner is automatically entitled to take over the deceased person’s share.
This right stems from common law and supersedes what you may have written in your will. Therefore, if you own a property with your spouse as a joint-tenant but wrote on your will that you want your half portion to go to your children, your portion of the property will still be transferred to your spouse, by way of right of survivorship.
In practice, when one of the owners in joint tenancy passes away, you will need to bring the original death certificate issued by the BC government to our office. Then we will file the transmission to survivor documents to the Land Title office. Before this transfer is done; however, if there is a mortgage registered on the property, you should consult your bank before transferring the shares.
In the next column, I will discuss in more details as to the pros and cons of purchasing a property in joint tenancy.
If you have further questions, please do not hesitate to contact our office and speak to myself or any of my friendly staff.
This is for general information purposes only and does not constitute legal or other professional advice or an opinion of any kind.
