What You Do Not Know About Holding Title to Your Home

How you hold title to your home with your partner can have significant financial consequences upon dissolution of the relationship, regardless of whether you and your partner are married or not.

There are two main ways to hold title in property.

Joint Tenancy

The first is known as “joint tenancy”. In this arrangement, each of the parties owns 100% of the property with what is known as a “right of survivorship”. This means that upon the death of one party, the other party becomes 100% owner of the property.

Tenancy-in-Common

The second way of holding title is known as “tenancy-in-common”, whereby each party owns a specified percentage interest of the property. Upon the demise of one party, because there is no right of survivorship, the property is not transferred solely into the hands of the surviving party; rather, their interest may be bequeathed by way of last will and testament. The surviving party continues to own their specified percentage.

In a situation where a parent decides to leave the relationship and ignore their children entirely, perhaps by finding another partner or having more children, a joint tenancy would result in this parent becoming the sole owner of the entire property should the other parent pass away. Should the surviving parent choose to ignore the children from the initial union, they can decide to leave the children nothing from the property and so the children will not benefit a whit from the value their parents put into that property over many years.

If the same situation arises, but the property is held by tenancy-in-common, the deceased party can bequeath their percentage interest in the property directly to the children; their interest is not given by way of right of survivorship to the other parent. In other words, the children’s interests are protected. Of course, in order to best protect the children’s interests, the party should also have a properly drafted last will and testament.

Can it be changed?

While it is particularly important to consider this rule early in the relationship, at the time of placing property in parties’ names, how title is held by the parties can be changed at a later date by an inexpensive step known as severance of title. It costs only a few hundred dollars. The other party does not have to be notified of the change, so if tensions begin to rise and there is a breakdown of the relationship, a parent can take this step to protect their children’s interest in the equity of the property. We recommend people carefully consider this upon separation or pending dissolution of the relationship, if not done upon purchase of the property.

The above is the current state of Ontario law. The law on this topic varies from province to territory. Be sure to contact a family law practitioner within your jurisdiction to ensure you have all the information you need.

The abiding mantra is always the same: Avoid serious, and sometimes irreversible, missteps in the process of separation and divorce. Retain a good family lawyer early on in the process, advisably prior to entering into any relationship.

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Please be advised that all articles written on this website are for informational purposes only and do not constitute legal advice on any subject matter. The information contained within these articles is subject to change at any time and should not be acted upon without previous consultation with legal counsel.

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