When two or more people own real estate they are required to specify on the title to the property how their ownership is ‘held’ or constituted.
Our legal system recognises two ‘types’ of ownership when there is more than one owner: joint tenancy or tenancy in common.
If you are purchasing real estate with another person (or in more than one buying entity, eg. two trusts) then we will need your instructions as to how the buying parties are going to hold the title after they become the new owners.
In short, joint tenancy means that all of the owners hold equal shares in the property, and if one of the owners dies then their share in the property becomes 0% upon their death. That is, their interest in the property does not follow their Will.
Tenancy in common means that the shares held by the owners can be specified–for example, 1/3 and 2/3 or 3/100 and 97/100. The shares are also devisable, meaning that they form a part of the estate of the owner if the owner dies, and the interest in the real estate will follow the terms set out in the Will of the owner.
The way that you choose to specify the type of ownership on the title can have significant estate planning implications, and is also looked at if you are separating from a spouse for example.
If you have any questions in relation to how you own your property, or you would like to review your estate plans, please do not hesitate to contact our office.