The terms ‘joint tenancy’ and ‘tenancy in common’ are often use in situations where two or more people purchase real property together. But what do these terms actually mean?

Joint tenancy

Where two or more people own real property as joint tenants each ‘joint tenant’ owns an interest in the whole of the property. This means that each joint tenant is entitled to possession and enjoyment of the whole of the property and therefore, cannot exclude the other joint tenant/s from any part of the property.

Joint tenancies are subject to a right of survivorship, which means that upon the death of one joint tenant, the surviving joint tenant inherits the interest of the deceased joint tenant. For example, if there are two joint tenants, then upon the death of a joint tenant the surviving joint tenant would own the property in full, and the joint tenancy would cease. However, if there are three joint tenants and of the joint tenants dies, then the two remaining tenants would continue to own the property as joint tenants.

Joint tenancy is a common form of ownership among couples and people who make equal contributions to the purchase of the property.

Tenancy in common

Under a tenancy in common each ‘tenant in common’ is regarded as having a separate and undivided interest in the property, equivalent to the percentage of the property that they hold. Tenants in common may hold their shares equally or otherwise in unequal portions. A tenancy in common is not subject to a right of survivorship and it is therefore important when holding a property as a tenant in common, that your interest in that property has been dealt with in your Will.

This is a common form of ownership where the purchasers of a property make unequal contributions to the purchase price. This form of ownership is also often used to assist with estate planning where the owners do not wish their interest in the property to automatically go to the remaining owner(s) when they die.

Changing the form of ownership

The forms of tenancy outlined above can be amended or dissolved through completing the requisite Land Titles Office forms. This will typically involve obtaining the written consent of all owners and if applicable, the mortgagee.

Implications for estate planning

A joint tenant cannot dispose of their interest in the property by Will, as upon their death their interest in the property will pass to the surviving joint tenant/s. A tenant in common can however dispose of their interest by Will because their estate will retain their interest in the property upon their death.

The type of ownership of the property can affect the rights the owner has in relation to the property and therefore how the property can be disposed of by Will. You should consider which ownership structure best suits your personal and estate planning needs.