Tenants in Common and Joint Tenants


When clients come into my office to get their work done for a purchase or for Estate planning, we ask a lot of important questions to make sure we prepare all of the documents correctly. This is so we can stay prepared and avoid mistakes when the title changes hands in the real estate transaction. I always want my clients to be safe in the future, their fore I want my clients to be honest and to provide me with all the information that they think is important for me to know before we start our work.

The most important question that I always ask my clients is how they want to hold title, meaning how they want their property to be owned by them as “Joint Tenants” or as “Tenants in Common”. When I ask this question, most of the time they ask me in return, “does it make any difference?” In land transactions “Joint Tenant” and “Tenants in Common” is the most important fact, which shows your share in the ownership of the property. Most clients think, it is the same thing, and they often think these words mean the same, but in reality they are not. Property owned by more than one person must be owned in one of two ways: joint tenancy or tenancy in common. In practical terms, the chief distinction between joint tenancy and tenancy in common is the right of survivorship. Only joint tenants enjoy right of survivorship.

The term “Joint Tenancy” is used to describe any situation where property, real or personal, is held in a manner which, at law, the death of one joint owner results in the property passing to the surviving joint owner(s) as opposed to passing to the estate of the deceased owner. All the owners have equal rights and they are held liable equally for anything. In easy words if the property is held under joint tenancy by two people, if one of the owners died, the share of the deceased owner passes to the surviving owner.

Let’s study this with an example: Dave, John and Smith bought a property together under Joint Tenancy. If Dave is unable to pay the property tax on time, then John and Smith are also liable equally, if Dave is unable to pay it, John and Smith have to pay Dave’s share. As the term “Joint Tenancy” also means the “right of survivorship”, according to this, after a few years, Dave dies, now the property is owned by both John and Smith equally. Because the property was held under joint tenancy, Dave’s spouse or children have no legal right on that property. A few years later, John dies, and now Smith is the only owner left of the property. With the joint tenancy, all the shares of the deceased owner will automatically go to the surviving owner. It can often be utilized for estate planning objectives. For instance, one spouse might use joint tenancy to make certain that the entire property held jointly by the spouses goes to the other, upon one’s death. Joint tenancy is frequently used between spouses for assets such as real property, investments, bank accounts and vehicles. Because joint tenancy creates the right of survivorship, when the spouse dies the property will transfer to the other spouse with minimal administrative issues. Because it does not form part of the estate, probate fees will not apply. Under Joint Tenancy no one can sell the property without written consent of each other.

Tenants in Common

Tenant in Common works differently than Joint Tenancy. A tenant in common is a form of ownership whereby each tenant holds a percentage of interest in the property. If one of the owners dies, that owner’s interest in the property passes to their estate, to be passed on, according to their Will. Tenants in Common can hold equal or unequal shares in the property.  Every party owns an undivided share in the property and as a result is free to possession of the whole property.  For example, there could be five persons who are tenants in common, but four of them could own 1/10 of the property each, and the fifth person might own 6/ 10 of the property. If the holder of a tenancy in common desires, either to sell or mortgage their interest in the property, that can be done by them, without the consent of the other tenants.  It is also possible for a tenant in common to apply the courts to “partition” the property or to sell the entire property and distribute the net proceeds of sale proportionately. Tenancy in common does not carry a right of survivorship as in joint tenancy.  In other words, if one of the tenants in common dies, the interest does not go to the other tenants, but goes to the estate of the deceased.

To understand this better let’s take one example: Let’s say Dave, John, and Smith bought property under Tenants in Common, Dave has 1/3 share in the property, John also has 1/3 share, and same with Smith. A few years later Dave dies, and his share becomes part of his estate. That means his share will be given to the person whoever is named under his Will, it could be his Wife or it could be his children. So “Tenants in Common” is the best option if you have been formerly married, have children from an earlier relationship, and have since remarried, you may perhaps desire to state in your Will that a clear piece of the worth of the estate goes to those children independently or jointly.  The only way this can be dealt with is in tenancy-in-common circumstances, because the interest would be deemed to be an asset of one’s estate.

If you are going to buy a house or need help with estate planning, feel free to give us a call for any type of information at 604-503-3853. I always try to provide the best service to make my client feel satisfied and I always make sure that my client understand all the pros and cons of work they are getting done.

Leave a Reply

Your email address will not be published. Required fields are marked *