Joint tenancy or tenants in common: how Ontario co-buyers take title

The short answer

When two or more people buy a home together in Ontario they decide how they will hold title. The two forms this guide covers are joint tenancy and tenants in common. This guide to joint tenancy and tenants in common in Ontario explains what each form means, what the law assumes if the paperwork is silent and what to settle before closing.

The key legal point is the default. Section 13(1) of the Conveyancing and Law of Property Act says that when land is granted to two or more persons they are considered tenants in common and not joint tenants, unless an intention to take as joint tenants sufficiently appears on the face of the document. So joint tenancy has to be chosen on purpose.

This is general information, not legal advice. Raise the question of title with your real estate lawyer early.

Joint tenancy and tenants in common side by side

	Joint tenants	Tenants in common
Default if the document is silent	No	Yes
What the document must show	An intention to take as joint tenants	Nothing special
When a co-owner dies	A surviving joint tenant can apply to be the owner by right of survivorship	Ask your lawyer how your share is dealt with
Can a co-owner be compelled to partition or sell	Yes	Yes
First-time buyer refund	Proportionate to the interest each qualifying buyer acquires	Proportionate to the interest each qualifying buyer acquires

The table sums up the points we confirmed on Ontario government pages. It is not a full comparison of every legal consequence. That is why the conversation with your lawyer matters.

What does the law say about taking title?

The Conveyancing and Law of Property Act is the statute behind the default. Section 13(1) applies to land granted, conveyed or devised to two or more persons other than executors or trustees. Unless the document shows an intention that they take as joint tenants, they take as tenants in common.

Section 13(2) adds that the section applies notwithstanding that one of the persons is the spouse of another. Section 13(3) says spouse means a spouse as defined in section 1 of the Family Law Act. It also covers either of two persons who live together in a conjugal relationship outside marriage. Married and common-law couples are therefore treated like any other co-buyers on this point.

In practice, the wording on the transfer is the thing to check. Ask your lawyer to explain in plain language how the form of ownership will appear and whether it matches what you and your co-buyers agreed.

What does survivorship mean?

The feature most people associate with joint tenancy is survivorship. The Ontario land registration bulletin on estate documents describes a survivorship application in which the applicant held the property as a joint tenant with the deceased. It says that by right of survivorship the applicant is entitled to be the owner as a surviving joint tenant.

Survivorship decides what happens to the property when an owner dies, so think carefully before choosing it with a relative or friend. The result may not match what each person wants for their own family.

A rule that matters for married parents buying with a child

The same bulletin points to an exception. It says section 26(1) of the Family Law Act provides that if a spouse dies owning an interest in a family residence as a joint tenant with a third party and not their spouse, the joint tenancy is deemed to have been severed immediately before death. A married parent who goes on title with an adult child is the obvious case to ask your lawyer about, because survivorship may not work the way the family expects.

We do not cover estate rules in depth here. Ontario.ca lists assets with joint ownership that automatically become assets of the other owners among the assets not to include in estate administration tax. Our post on estate administration tax in Ontario explains the tax. Our guide to selling a house in probate in Ontario covers what happens when a home is part of an estate.

How title interacts with the first-time buyer refund

Title and tax come together at closing. Ontario’s first-time homebuyer land transfer tax refund has a maximum of $4,000 for transactions on or after January 1, 2017. Ontario.ca says the refund is reduced if one or more of the purchasers is not a first-time homebuyer. It adds that the refund is proportionate to the interest acquired by the individuals who qualify.

Couples face a stricter rule. Ontario.ca says a purchaser’s spouse cannot have owned an eligible home or had any ownership interest in one anywhere in the world while they were the purchaser’s spouse. If that is the case, no refund is available to either spouse.

Ontario.ca gives an example. A parent who is not a first-time homebuyer and a child who is a first-time homebuyer purchase with equal 50/50 interests. The child may claim 50% of the refund. The claim cannot exceed 50% of the maximum.

Here is an illustrative example with round numbers, not a real purchase. If the maximum refund is $4,000 and a qualifying buyer holds a 50% interest, the cap on that buyer’s claim is $2,000. A co-buyer who has owned before cannot claim, so the family would see a smaller refund than a first-time buyer purchasing alone.

Our post on land transfer tax in Markham covers the rates and who qualifies. Our post on the FHSA and the Home Buyers’ Plan explains the federal savings programs. Confirm the rules for each co-buyer with CRA or an accountant.

What happens if the owners disagree?

Co-ownership works until the owners want different things. Ontario’s Partition Act sets out the legal backstop. Section 2 says joint tenants and tenants in common may be compelled to make or suffer partition or sale of the land. Section 3(1) says any person interested in the land may bring an action or make an application for partition or for the sale of the land under the directions of the court if the court considers a sale more advantageous to the parties interested.

The court in that Act is the Superior Court of Justice. The point for buyers is simple: choosing either form of title does not remove the right of a co-owner to ask the court for partition or sale.

One way to settle expectations in advance is a written co-ownership agreement prepared by a lawyer. Topics worth raising include:

• Who pays the mortgage and carrying costs and in what proportion
• What happens if one owner wants to sell
• How a buyout would be priced
• What happens if one owner can no longer pay

We cannot draft that agreement for you. We can help you come to the lawyer with clear questions. Our first-time buyers service is built around that early planning.

What to decide before closing

These decisions are best made well before closing day. Our post on closing day in Ontario explains the order of events. Our buyers page shows the wider process.

Use this checklist when you meet your lawyer:

• Confirm every person who will be on title and the exact names to appear
• Ask which form of title fits your situation and why
• Ask how the transfer will show an intention to take as joint tenants if that is what you choose
• Decide each person’s interest in the property and whether it is equal
• Check whether every purchaser qualifies as a first-time homebuyer for the land transfer tax refund
• Ask whether a co-ownership agreement is advisable
• Ask how your choice interacts with your will and your estate plans
• Keep copies of every document you sign

This article explains how Ontario’s rules work in general and does not replace advice from a real estate lawyer. If you would like to talk through your plans before you make an offer, contact us.