Types of Ownership
Real estate can be owned by two or more persons. This process is also known as taking title on a purchase. Both individuals and corporations can also hold title on a property.
In Ontario, there are four fundamental ways in which many persons can take on the title on a property. It is recommended that each person obtain independent legal advice to understand the potential liability as a property owner.
Registered ownership is when one person is a registered owner of a property. It refers to a legal term who actually owns the property in question. Presence of a single owner is deemed as registered ownership.
Each property owner owns an equal share of the property in this kind of ownership. Joint tenancy is a means whereby two or more persons own a property with mutual right of survivorship. That means that if one joint owner dies, the other owner(s) automatically acquire the deceased’s interest in the property.
The deceased’s interest in the property held jointly does not pass through their estate, and is not affected by the terms of their will.
Because the property does not pass through the estate, there is no estate tax payable on property that is acquired by the right of survivorship. The transfer out of the deceased’s name will still need to be done, by a document known as a Survivorship Application.
Tenants in Common
Each owner’s share can be the same or different in this type of ownership.
Tenancy in Common means that in the circumstance when one purchaser becomes deceased, their interest in the property is transferred as per the contents of their will. If the deceased owner, did not have a valid will, then their interest in the property is decided as per the Law of Ontario, if the property is situated in Ontario.
In this type of ownership, the name of the real owner is not stated in the ownership document. It is recommended to discuss this type of ownership case with your trusted real estate lawyer. In event of a trust, the person whose name is registered in the title in the Ontario Land Registry office may not the actual or beneficial owner.
In this type of ownership, a special partnership agreement is entered into if more than one person is shown on the title as owner and contributing substantial funds for the purchase. Entering into such an agreement helps in avoiding any future conflicts in the event of distribution of proceeds when the property is resold.
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