Property ownership comes in a variety of types. In general, landowners have the freedom to do whatever they want with their property, with the exception of violating state-enforced rules. For example, property owners may rent their property to others, sell or transfer possession, use their property as security for loans, and give their property to beneficiaries upon their death. Although these privileges remain the same, there are certain distinctions depending on the nature of property ownership.
In this type of ownership, each property owner holds an equal share of the property. Joint tenancy is a legal arrangement in which two or more individuals hold property together with survivorship privilege. That is, whenever a joint owner dies, the remaining joint owners immediately inherit the deceased owner’s interest in the property.
In the jointly owned property, the deceased interest in the property would not pass into their will and is unaffected by their will’s provisions.
Since the property does not pass into the estate, no estate tax is due on property inherited through the right of survivorship. Transfers out of the deceased’s name would also be completed through a document called a Survivorship Application.
Tenancy in the Entirety
Tenancy in the entirety is a type of joint tenancy in which each spouse owns half of the property. Neither partner is permitted to sell their interest in the property without the permission of the other. This protects an individual’s inheritance of property in the event their partner declares bankruptcy.
When one person owns a property alone, it is known as sole ownership. To transfer property ownership, the individual must use a property deed paper. When a property owner passes away, ownership is transferred by a will or trust.
Tenancy in Common
In this form of ownership, each owner’s share will be the same or different. Tenancy in Common implies that once one of the purchasers dies, their equity in the property is transferred according to the terms of their will. If the deceased person did not leave a written will, their interest in the property is decided under Ontario law if the property is in Ontario.
Several people own shares of a house of community property. Each share has the same value. When a property owner passes away, their part of the property is passed over to a beneficiary. A community property owner may sell their shares at any time without incurring any financial penalties.
Role of an Attorney
A professional real estate lawyer can be a knowledgeable resource to assist you with your legal transactions, paperwork, and insurance whether you’re a first-time home buyer, or searching for your second or third property in this complex Canadian real estate industry.
Real estate attorneys and real estate brokers can seem to be synonymous at first sight, but their positions and duties in acquisitions and transactions are distinct.