SITUATION 1: You may have thought you entered into a joint tenancy, but you discover that it was never created in the first place, or it has been “severed” without your knowledge. Of note, the remaining owner does not need to be notified of the change in tenancy from joint tenancy to tenancy in common as it can be done by one owner. The net proceeds from the sale of the Knox Road Property were deposited into a joint bank account in the names of Janes and her mother, Mrs. Burnett. If the joint tenancy is severed, both parties will thereafter hold their interests in the land as tenants in common each holding what is called an ‘undivided 50% interest in the land’ and the survivor of the two owners of the land will not automatically receive the other’s interest when that person dies. In such cases the spouse will need to sever the joint tenancy and change ownership of the home from jointly owned to ownership as tenants in common. The Courts have long recognized that joint tenancy can be severed through a “course of dealing” which indicates the parties’ … If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at firstname.lastname@example.org. Joint tenancy is most associated with its right of survivorship. Joint Tenancy With Survivorship . This involves a transfer of the share of the property to himself or herself as a tenant in common. if you are gifting the property to someone and want the beneficial interest to be included in the transfer, you can consider stating your intentions in a legal document (sometimes called a “Deed of Gift” for an example, click, you can also enter into legal arrangements declaring that the beneficial interest does. And third, the joint tenants may, in the course of their dealings, intimate that their interests constituted a tenancy … INTRODUCTORY’NOTE’!! You can complete our online membership application. Each joint tenant has an identical interest and holds an equal right to use the whole of the property (including the house). Severance of joint tenancy usually occurs when one or more of the joint tenants transfer their interest to a third party, or one or more joint tenants file a petition in court to partition the property. The tenancy can also be changed either to convert from joint tenancy to tenancy in common or vice versa by way of a transfer of either one person’s interest or both interests. If two or more people own property as a Tenancy in Common, it does not have to be divided equally. For a joint tenancy to exist, the court affirmed that “four unities” must exist: unity of title, unity of interest, unity of time and unity of possession. Unity of title means that the title of each joint tenant arose from the same instrument. Joint tenancy is generally preferred for most spouses. The most secure digital platform to get legally binding, electronically signed documents in just a few seconds. make sure you clearly understand the nature of the ownership being suggested and the purpose for the suggested change in ownership; consider whether there are other ways to accomplish the same purpose,, and if the purpose is merely to give someone the ability to be able to make legal decisions about that property when you are no longer able to do so then consider entering into an Enduring Power of Attorney, because you can revoke a Powers of Attorney as long as you are still mentally capable of doing so; and. we ask that you become a part of our work by becoming a member or through a donation. If possible, Courts prefer to literally divide the property in equal pieces and give each joint owner a piece. Let’s say you are the sole owner of property, such as your house, and you are considering adding another person(s) as an owner. The decision in Zeligs v. Janes, 2016 BCCA 280 (CanLII) considered whether funds withdrawn from a joint bank account by one joint tenant and then transferred to herself for her own use would sever a joint tenancy. On this appeal, Janes argued that a joint tenant holding a joint bank account has the right to withdraw funds from the account and, when he/she does, the funds become the exclusive property of the withdrawer unless the funds are held on a resulting trust (which, on the facts of this case, the lower court found not to exist). if you are transferring to an adult child, make sure your intentions are properly recorded at the time of transfer. Severing the Joint Tenancy. You might want to review this booklet on joint ownership of bank accounts: What every older Canadian should know about: Powers of attorney (for financial matters and property) and joint bank accounts. That same day, Janes withdrew the full amount of the proceeds to pay for another property that Janes and her husband had purchased. legal title means that the holder of the title holds the property for the true owner (the one with the beneficial interest) – for example, you may wish to give someone else legal title to your property so that they can help you manage your affairs, but not the right to use the property for their own benefit. In other words, if you transfer part of your ownership in your house to another person in joint tenancy, whether a family member, friend, or someone else, that person or persons have the same legal rights to that house as you do. In British Columbia, however, s. 18 (3) of the Property Law Act, R.S.B.C. Second, joint … In order to sever the right of survivorship, a tenant must only record a new deed showing that his or her interest in the title is now held in a “Tenancy-in-Common” or as “Community Property”. In other words, your interest will not “pass” with your estate and, therefore, you will not be able to give the property to other children or other beneficiaries through your will. This case highlights that care must be taken when dealing with assets held in joint tenancy. Considering prior case law, the court maintained that a joint tenancy may be severed and converted into a tenancy in common in three ways. The main point, however, is to generally recognize the benefits and burdens of each type of co-ownership and understand that the ownership relationship may be terminated for any number of reasons. These are examples only. house), the ownership is a tenancy-in-common. The title company will help construct a deed stating the owners are reverting “interest in the property” to themselves. This is critical because, upon your death, this documentation may become the primary source of information used to determine how you intended the property to be transferred. Joint tenancy with rights of survivorship (JTWROS) is a type of account that is owned by at least two people. If two people own property as tenants in common and one dies, the deceased person’s interest in the propert… It is important to be aware of this presumption if you want to gift your property before your death to your adult children. In this arrangement, tenants have an … Obviously, one spouse may not necessarily consent to the other spouse severing the joint tenancy. Even where a true joint tenancy with a right of survivorship exists, a unilateral action by a co-owner may sever the joint tenancy. Normally, without evidence of a true gift, the law will presume that a transfer without payment to another person was intended to be done merely to assist in the management of the person’s affairs (sometimes called a resulting constructive trust). Change from joint tenants to tenants in common This is called ‘severance of joint tenancy’. This approach was confirmed by the Supreme Court of Canada in the case of Pecore v. Pecore where the court made a decision that this presumption applies in the case of property transfers as between parents and their adult children. © Miller Thomson LLP 2020. You can complete our online volunteer application. Joint tenancy gives each person on title an undivided interest in the entire property. This publication may be reproduced and distributed in its entirety provided no alterations are made to the form or content. You may be a couple, group of friends, brother and sister, or parent and child, buying a house together to get on the property ladder. This is an important point to understand, particularly if you are contemplating sharing the ownership of your house or other property in joint tenancy with a person from outside your family with whom you may have just recently formed an acquaintance. SITUATION 3: You want to gift some of your property to your adult child prior to your death, or outside of anything that is in your will, but you have heard about a presumption in law that would undo the effect of the gift if you don’t record your wishes properly. Tenants in common, on the other hand, may have different proportions or shares of the property as well as different durations of interest. If only the legal, and not the beneficial, interest is transferred, then the surviving owner likely holds the asset in trust for the estate of the deceased person.. To form a joint tenancy, certain requirements must be met. Second, joint tenants may agree to sever by mutual agreement. In her will, Mrs. Burnett provided that her three grandchildren should be given $50,000 each and the remainder of her estate should be divided equally among her two daughters, Janes and Barbara Zeligs. Unity of Possession means that each of the co-owners has an equal right to possession of the entire property. Such unilateral actions could sever the joint interest and the right of survivorship. 1. 1996, c. 253 allows for severance by transfer of personal property to oneself and another. There are of course any number of factors that relate to each of the above possibilities for severing a joint tenancy which require legal analysis. As a consequence of the severance of the joint tenancy, the court decided that half of the sale proceeds from the Knox Road Property flowed to the estate of Mrs. Burnett. As such, the property will pass according to the parent’s estate (according to their will or, if there is no will, according to the laws of “intestacy”). First, a joint tenant may act unilaterally upon his or her share so as to destroy the four unities. This information is not meant as legal opinion or advice. You may be married or in a relationship, and want to know that if you separate, when the property is sold you will each get out what you have put in. This can be done through gift or sale. cars, bank accounts, etc), the ownership is a joint tenancy; and. Even though 2 or more names appear as joint tenants on a property ownership document, a joint tenancy will not automatically be created or continue in law. That is, you can give your share of the property to someone in your will, or if you die without a will, it will “pass” to the closest relative according to BC laws of intestacy (which means dying without a will) even if the person inheriting the share of property was not formerly one of the tenants-in-common. In particular, in dealing with bank accounts held in joint names, a joint account holder should be cautious in withdrawing funds unilaterally to be used for his/her own benefit. Unity of title – property transfer happens under the same legal instrument; Unity of interest – interest of each joint tenant must be identical in nature, extent, and duration; Unity of possession – each joint tenant has an undivided possession of the whole property; and. It may sometimes seem easier, more convenient, or simply a matter of estate planning to transfer all or part ownership of your property to another person(s), however, it is important to understand any and all legal implications before making such decisions. This creates a tenants in common document and will list the owners' names and the percentage of property they own. BECOME A MEMBER If you transfer the ownership as a “joint tenancy,” it means that the property is owned by you and whomever you transfer ownership to in equal proportions. We do not warrant its accuracy. This agreement “severs” a joint tenancy, and sets out how the sale proceeds of real property will be split between the owners. Upon termination, a tenancy in common is formed … It will require a trust deed to be prepared usually by a qualified solicitor or conveyancer and setting out that the new terms of ownership are for all the joint owners to own the property as beneficial Joint Tenants. Joint tenants are treated as a single owner for legal purposes. Reporton’Joint’Tenancy’’! Your intentions should be clearly documented, as discussed above. Courts cannot literally split a residential property "in-kind", for the obvious reason depi… Upon the death of one of the tenants-in-common, their interest “passes” with their estate. A few months later, Mrs. Burnett died. Joint tenancy, on the other hand, is a form of shared ownership and creates an undivided … Ten years later Ungrateful severed the joint tenancy by recording a grant deed in which he granted to himself his interest as a tenant in common. SITUATION 2: You may think you have transferred ownership of part of your property to a relative to avoid probate, but they discover after your death that you only transferred the “legal title” and not the “beneficial interest” in the property. Unity of time means that all the interests are vested concurrently. If you wish to “gift” a portion of your property to your adult child(ren) outside of your will so it does not make up part of your estate, there is an important presumption that exists in law that you should be aware of. If you are thinking about sharing ownership of your property, whether it be real property (like your house) or personal property (like your car or bank account), you should be aware of these general distinctions between the legal concepts of “joint tenancy” and “tenancy in common.”. Joint tenancy or tenancy in common Property owned by more than one person must be owned in one of two ways: joint tenancy or tenancy in common. This could be done by simply sending the Notice of Severance to the other party in the post and asking that they sign and date the notice themselves and return it. A joint tenancy may be severed at the option of either joint tenant, or by mutual agreement. The presumption is “rebuttable” in that it will be up to the adult child to provide evidence or show that their parent intended the property to transfer to the adult child, beneficial interest and all. The ‘deed of gift,’ even though it is called a ‘deed,’ does not have anything to do with legally transferring real estate or ownership in a joint account. It simply helps clarify what your intention is. In arriving at its decision, the BC Court of Appeal provided an excellent summary of the law relating to joint tenancy and how a joint tenancy may be severed. BECOME A VOLUNTEER This person(s) may be an adult child or children, a close friend or an acquaintance. Even with jointly held property, there is a difference in law between having the “beneficial interest” and the “legal title” to the property, in that: Therefore, just because you think you have transferred a share of your property to another person, it is important to consider the legal effect of the transfer. © 2020 Miller Thomson LLP. 1996, c. 377 provides that a joint tenant may sever a joint tenancy by transferring property to himself or herself without requiring that the co-owner (s) be notified and s. 30 of the Law and Equity Act, R.S.B.C. A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. It may sometimes seem easier, more convenient, or simply a matter of estate planning to transfer all or part ownership of your property to another person(s), however, it is important to understand any and all legal implications before making such decisions. In other words, did you transfer the type of interest (beneficial or legal or both) that you intended? Joint tenancy is distinguished by the four unities: 1. possession, 2. interest, 3. title and 4. time. And third, the joint tenants may, in the course of their dealings, intimate that their interests constituted a tenancy in common. You might want to review this article about joint ownership pros and cons: Joint Tenancy: Pros and Cons. The court disagreed. The main benefit of a joint tenancy is the right of survivorship which provides that when one joint tenant dies, his or her interest in the property passes automatically to the surviving joint tenant(s). Become a member, Donate or Volunteer to help prevent Elder Abuse in BC, MEDIA/VOLUNTEER/OUTREACH INQUIRIES: email@example.com, GENERAL INQUIRIES: firstname.lastname@example.org, Find resources and contacts in your area for Elder Abuse issues and concerns, The Federal Governments Online Tool to help find programs for Seniors in need, Copyright © 2020 Seniors First BC. This means that each person is a 100% lifetime owner of the entire property. Janes held a power of attorney for her mother and, in 2010, she sold the Knox Road Property for $2.7 million. But strangely enough, the partition process begins with the following question: Can we literally divide up the property between its owners? The result is that on the death of the other owner(s), their portion of the ownership passes with their estate(s), instead of the property ownership coming back to you, as it would under a joint tenancy. However, that is not the only way that joint tenancy can be severed. This typically occurs when all of the joint tenants enter into an agreement which expressly purports to sever the joint tenancy. In Zeligs Estate v Janes , 2016 BCCA 280, an aging widow, Dorothy, transferred her home in British Columbia into joint tenancy with her daughter, Diana, after Diana and her family moved into the home with Dorothy. Zeligs died one year after her mother and Zeligs’ husband, as executor of Zeligs’ estate, commenced an action against Janes claiming, among other things, that the joint tenancy on the Knox Road Property had been severed when the property was sold. You may be asked to share ownership of your property (house, car, bank account, etc. Therefore, documentation of your intentions requires careful drafting and assistance from a property or estate lawyer or a notary to ensure that what you want is properly documented. 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