Understanding the Home Ownership Structure 

Understanding the Home Ownership Structure

1. Joint Tenants in Common:
   • Joint tenants generally share equal ownership of the property, and if one of the joint tenants dies, their share automatically transfers to the surviving joint tenant(s) through the right of survivorship.
   • Tenants in common, on the other hand, own a specific percentage of the property. Unlike joint tenants, tenants in common can have unequal ownership shares, and their share can be sold or transferred independently of the other owners.
2. A Third Party with a Percentage of Interest:
   • In this scenario, you have two parties who are joint tenants and one additional party who owns a percentage of the property as a tenant in common. The third party's ownership does not have the right of survivorship, and their share of the property will not automatically transfer to the other owners upon death. Instead, it becomes part of their estate.

Selling the Property

When all parties agree to sell the property, the process typically involves:

1. Agreement to Sell:
   • All owners must agree to sell the property. This includes both the joint tenants and the tenant in common. If any party does not agree to the sale, it can complicate the process. In such cases, a court may need to intervene to resolve the disagreement, which could result in a forced sale or partition of the property.
2. Division of Sale Proceeds:
   • The proceeds from the sale are divided according to each party’s ownership interest. The joint tenants would share their portion equally, while the tenant in common would receive a share based on their percentage of ownership.
   • For example, if the two joint tenants collectively own 60% of the property and the third party owns 40%, the sale proceeds would be divided accordingly: 60% split equally between the joint tenants and 40% to the tenant in common.
3. Mortgage and Liabilities:
   • If there is an outstanding mortgage or any liabilities tied to the property, these must be settled before the sale proceeds are distributed. All parties are generally responsible for these debts based on their ownership interest. For instance, the joint tenants might be jointly responsible for their share of the mortgage, while the tenant in common is responsible for their portion.
4. Legal Considerations:
   • Given the complexity of this ownership structure, it is advisable for all parties to seek legal counsel. A real estate lawyer can ensure that the sale is conducted fairly and that the rights and interests of all parties are protected.

What Happens if There’s Disagreement?

If there is a disagreement among the owners regarding the sale of the property, the following may occur:

1. Partition Action:
   • Any of the parties can file a partition action in court, requesting that the property be divided or sold. The court may order a sale if it determines that the property cannot be physically divided (which is often the case with residential properties).
2. Court-Ordered Sale:
   • The court may order the property to be sold, and the proceeds will be divided according to each party’s ownership interest, as described earlier.
3. Mediation or Negotiation:
   • Before taking legal action, parties may choose to go through mediation or negotiation to reach an agreement on the sale. This approach can save time and legal costs and can lead to a more amicable resolution.

Conclusion

Selling a home in British Columbia where two joint tenants in common have a third party with a percentage of interest involves navigating a complex ownership structure. All parties must agree on the sale, and the proceeds must be divided according to the ownership interests. Disagreements can lead to legal action, including a court-ordered sale. Given the potential complications, it’s essential for all involved to seek legal advice to ensure their interests are protected throughout the process.