Joint Tenants vs. Tenancy in Common – What You Need to Know When Purchasing a Home!

Kelly Hudson • March 9, 2021
Decisions relating to real estate can have huge financial outcomes. Before deciding how to share ownership over what is likely the largest investment in your life, you may benefit from professional advice, with a real estate lawyer before you make such important decisions.

Many people purchase property together, including couples, family, friends, and business partners. This is a big step, so it is important to consider the division of ownership. 

In property law, there are two types of ownership:
   1. Joint tenancy
   2. Tenants in common

At first glance, these terms sound similar. However, they have different legal and financial effects on the rights of the registered proprietor should one of the parties exit the property ownership, either by death or by selling the property. 

This BLOG covers the basic differences between joint tenants and tenants in common. 

Joint Tenancy

 

In a joint tenancy, each co-owner owns an undivided interest in the whole of the fee simple estate, and together, all co-owners own the whole of the property. The essential feature of this type of ownership is the right of survivorship. When one joint tenant dies, the entire estate remains with the surviving joint tenants. The result is that the surviving joint tenants acquire the whole of the estate and this continues until there is a sole survivor. Therefore, joint tenants cannot leave their interest to anyone in their wills.

  • The default ownership for most couples is joint tenancy.

 

Tenants in Common

 

Where 2 or more persons hold interests in a property, and each has a separate share. 

 

While none of the owners may claim a specific area of the property, tenants in common may have unequal shares and different ownership interests.

  • For instance, Tenant A and Tenant B may each own 25% of the home, while Tenant C owns 50%.
  • Tenancies in common also may be obtained at different times, so an individual may get an interest in the property years after one or more other individuals have entered into a tenancy in common ownership.

 

Each owner may sell or bequeath their interest in the property.

 

Terminating Joint Tenancy vs. Tenancy in Common 

 

Joint Tenancy can be broken if one of the co-owners transfers or sells his or her interest to another person, thus changing the ownership arrangement to a tenancy in common for all parties. 

  • This type of holding title is most common between couples and among family members in general since it allows the property to pass to the survivors without going through probate (saving time and money).

 

Tenants in Common can be broken if one of the following occurs:

  • One or more co-tenants buys out the other(s).
  • The property is sold and the proceeds distributed amongst the owner’s.
  • A partition action is filed, which allows an heir to sell his or her stake.
  • At this point, former tenants in common can choose to enter into a joint tenancy via written instrument if they so desire.

 

For more information about the difference between joint tenancy and tenancy in common – contact your real estate lawyer.

 

Mortgages are complicated, but they don’t have to be… Engage an expert!

 

Kelly Hudson
Mortgage Broker

Mortgage Architects
Mobile: 604-312-5009
Kelly@KellyHudsonMortgages.com 
www.KellyHudsonMortgages.com

 


Kelly Hudson
MORTGAGE ARCHITECTS
RECENT POSTS 

Mortgages Made Simple: Understanding Fixed vs. Variable Interest Rates in Canada

By Kelly Hudson • March 17, 2025
Since March 2022, mortgage rates in Canada have risen significantly, raising concerns for homeowners and potential buyers. But what drives these changes, and how do they impact your choice between fixed and variable mortgage rates? Let's simplify this important financial topic.

Getting a Mortgage After Separation or Divorce in Canada: What You Need to Know

By Kelly Hudson • February 14, 2025
Separation and divorce are major life events that significantly impact finances—including homeownership. In Canada, approximately 40% of marriages end in divorce , making it a common challenge for homeowners. As a mortgage broker, I work with many clients who are navigating the challenges of keeping or selling their home, refinancing, or qualifying for a new mortgage post-separation. Lenders assess these applications differently than standard ones, particularly when it comes to income, debts, and liabilities . Whether you want to stay in your current home or move on to a new one, understanding your mortgage options is essential. How Separation & Divorce Impact Your Mortgage When separating from a spouse, one of the biggest financial decisions is what to do with the family home. Here are some common scenarios: 1. Keeping the Home If one spouse wants to stay in the home, they must refinance the mortgage to remove the other person’s name from title and buy out their ex’s share of the equity. 2. Selling the Home In some cases, selling the home and splitting the proceeds is the best financial option. This provides a clean break but requires both parties to qualify for new mortgages if they wish to buy separate homes. 3. Co-Owning After Separation Some ex-partners choose to co-own the home for a period, often for the sake of stability for children. While this may work temporarily, it will complicate future borrowing power . 4. Existing Mortgage Responsibilities Even if a separation agreement states that one party is responsible for the mortgage, lenders will still consider both parties liable unless the mortgage is refinanced and the ex’s name is removed from the title & the mortgage. Important : If both names remain on the mortgage and your ex stops making payments, your credit score and future borrowing ability will be affected .
Share by: