Understanding Joint Tenancy vs. Tenants in Common on Land Titles in British Columbia

When purchasing property in British Columbia, one of the crucial decisions you'll need to make is how to hold the title. The two primary forms of ownership are joint tenancy and tenants in common. Each has significant legal implications, especially regarding ownership rights, responsibilities, and what happens in the event of a co-owner's death. Here’s a breakdown of these two types of ownership and what they mean for you as a property owner.

Joint Tenancy

Joint tenancy is a form of co-ownership where two or more individuals hold equal shares in the property. The defining feature of joint tenancy is the right of survivorship. Here’s how it works:

1. Right of Survivorship:
   • When one joint tenant dies, their share of the property automatically passes to the surviving joint tenants, without going through probate. This means that the deceased’s interest in the property does not form part of their estate and cannot be passed on to their heirs through a will.
2. Equal Ownership:
   • All joint tenants have equal ownership and interest in the property. This means that they must share equally in any profits from the property, such as rental income, and are equally responsible for any liabilities, such as mortgage payments.
3. Implications in Disputes:
   • If a dispute arises among joint tenants, it can be complex to resolve, especially if one wants to sell their share. Generally, the property cannot be sold without the agreement of all joint tenants unless a court order is obtained.
4. Best for Couples or Close Relations:
   • Joint tenancy is often chosen by married couples or close relatives because of the right of survivorship, which simplifies the transfer of ownership upon death.

Tenants in Common

Tenants in common allows two or more individuals to own a property together, but with different shares and without the right of survivorship. Here’s what you need to know:

1. Separate Shares:
   • Each tenant in common owns a specific percentage of the property, which doesn’t have to be equal. For example, one owner could hold 60% while the other holds 40%. This allows for more flexibility, particularly in investment properties where contributions to the purchase may vary.
2. Transferable Interests:
   • Unlike joint tenancy, when a tenant in common dies, their share of the property becomes part of their estate and can be passed on to heirs through a will. This can be beneficial if you wish to ensure that your share of the property goes to specific beneficiaries.
3. No Right of Survivorship:
   • Because there is no right of survivorship, the ownership interest does not automatically pass to the other co-owners upon death. This means that your share could be inherited by someone outside the original ownership group.
4. Best for Business Partners or Unrelated Co-Owners:
   • Tenants in common is often the preferred choice for business partners or unrelated individuals who purchase property together. This allows each person to maintain control over their specific share of the property.

Legal Implications and Considerations

When deciding between joint tenancy and tenants in common, it’s essential to consider the following legal implications:

1. Estate Planning:
   • Joint tenancy may simplify estate planning for couples, as the property transfers automatically upon death. However, tenants in common may be better if you want your share of the property to go to your heirs rather than the other co-owners.
2. Property Disputes:
   • With joint tenancy, disputes over selling or dividing the property can be complicated, as unanimous agreement is typically required. Tenants in common allows for easier division or sale of individual shares, which can be beneficial in disputes or if one party wishes to exit the ownership arrangement.
3. Financial Contributions:
   • In a tenants in common arrangement, each owner’s financial contribution to the property can be reflected in their ownership percentage. This flexibility is not available in joint tenancy, where ownership is automatically equal regardless of contribution.
4. Legal Documentation:
• It’s crucial to have clear legal documentation, especially for tenants in common, to outline the percentage of ownership and responsibilities. This ensures clarity in financial obligations, property management, and what happens if an owner wishes to sell their share.
  
  Conclusion
  

Choosing between joint tenancy and tenants in common is a critical decision that affects not only your current ownership structure but also your estate planning and future property rights. Understanding the differences between these two forms of ownership is essential to making an informed decision that aligns with your long-term goals and relationships. Consulting with a real estate lawyer is highly recommended to ensure that your choice reflects your intentions and provides the legal protection you need.