Joint Tenants vs Tenants in Common. What’s the difference?

By Avi Charney

October 26, 2020

What is the difference between owning property as “Joint Tenants” vs “Tenants in Common”?

There are several ways to hold title (own) property in Ontario. You could be a sole owner, hold title in trust or in a partnership.

A joint tenancy and a tenancy in common are the main forms through which two or more persons may collectively hold interests in property. When two or more people are looking to purchase a property, they will need to decide how they wish to hold title (take ownership). So, what are the key differences between owning property as joint tenants and tenants in common?

Joint Tenancy

In a joint tenancy, joint tenants have identical undivided interests in the property. The co-owners hold the property as a unified whole such that each holds an equal interest.

For a Joint Tenancy what are known as four unities must exist: (1) unity of title, the co-owners own the same property; (2) unity of interest, the co-owners take an equivalent or equal interest; (3) unity of possession; and (4) unity of time, the interest of all the co-owners vests at the same time. If one or more of the four unities is not present, the result is a tenancy in common.      

Joint Tenancy and the Right of Survivorship

The main feature of Joint Tenants is the Right of Survivorship, which allows the surviving purchaser(s) on title to inherit the deceased’s interest in the property. Where one of the “joint tenants” dies, the surviving joint tenant(s) usually automatically becomes the owner(s) of the property regardless of the provisions of the deceased’s Will.

Joint Tenancy is often used by spouses, but also can be used by non-spouses as part of an estate planning strategy, which allows property to pass to another, usually a trustee.

If multiple co-owners remain, the Joint Tenancy remains in existence, while if only one owner survives, the entire interest in the property passes to the survivor and they become the sole owner. In contrast, upon the death of a co-owner in a Tenancy in Common, the deceased’s interest in the property passes to his/her estate.

Tenancy in Common

In contrast, in a tenancy in common, each co owner owns a proportionate interest (percentage %), and one co-owner may be entitled to a greater percentage % in the property than the other(s). When one dies, their percentage ownership will be distributed according to their Will, or if they don’t have a Will, according to the provisions of the Succession Law Reform Act, 1990.  The essential unity which characterizes a tenancy in common is that of possession.

Things to consider

Tenants in common should generally have a co-ownership agreement to spell out the rights to the property. For example, these are things that could be dealt with in a tenancy in common: whether a third person who is not an owner live in the property? Is each owner required to a proportionate share of the property taxes, utilities, maintenance, insurance premiums and other carrying costs? Who will make decisions with respect to repairs and maintenance? Can one owner sell his or her factional interest to a third party? It is best for Tenants in Common to know the answers to these questions up front, prior to entering into an Agreement of Purchase and Sale.

Can Joint Tenants become Tenants in Common?

Yes, a joint tenancy can be converted into a tenancy in common quite easily and even unintentionally by the conduct of the parties, as noted. For example, a joint tenancy may be severed by one joint tenant entering into an option to purchase. The joint tenancy may be severed by operation of law, as upon the bankruptcy of a joint tenant, whether the property held in joint tenancy is real or personal. Where a debtor conveys lands owned by the debtor and his or her spouse as joint tenants, and some years afterward makes an authorized assignment for the benefit of creditors, the assignment severs the joint tenancy and creates a tenancy in common, and the trustee is entitled to a one-half interest in the property.

The time- honoured test is whether there was a course of dealing sufficient to intimate that the interests of the parties were mutually treated as constituting a tenancy in common. If the Joint Tenants act like Tenants in Common, they sever the certainties required for a joint tenancy and become Tenants in Common.

Where there is doubt whether a joint tenancy or a tenancy in common has been created, the court will lean toward finding a tenancy in common.

One can imagine the problems with this distinction, some of which noted in this article by Albert Oosterhoff: “If fact, use of the joint tenancy device often causes problems and can be productive of litigation down the road if it is not done with care.”

Estate Considerations

It is critical that you know the difference and how you want to hold title to your property. Unintentionally severing a joint tenancy will have major consequences on how your estate is distributed. If done right, holding a property in trust or as a joint tenancy can be used as an estate planning tool. Consult a lawyer to clarify your options how to hold property and discuss how your real estate fits in to your estate plan! Make sure that your Wills and Powers of Attorney are current. Contact us to discuss.

The ways to hold title should highlight the importance of consulting legal counsel when deciding on which form of ownership to take. It follows, that this is not legal advice nor should it be relied upon as such. Nothing replaces obtaining qualified legal advice from a lawyer specializing in the area of law relevant to your circumstance.

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The general information on this page is not applicable to any specific case and is intended for information purposes only. It is not a substitute for legal advice and may not be relied on as such. Readers are expressly advised to consult with a qualified lawyer for advice regarding their specific circumstances and entitlements under Ontario law.