In Ontario (aside from sole ownership)
there are four basic ways for two or more individuals to own real estate.
Each person involved in ownership in the transaction should obtain his
or her own independent legal advice as to method of ownership and potential
liability as an owner.
JOINT TENANTS:
Joint Tenancy means that, should a purchaser become deceased, the remaining
purchaser(s) on title will inherit the deceased's interest in the property.
Where one of the "joint tenants" dies, the surviving joint tenant(s) automatically
becomes the owner(s) of the property no matter what a will might state.
This is the manner of holding title most commonly used by spouses.
TENANTS IN COMMON:
Tenancy in Common means that should a purchaser become deceased, that
deceased person's interest in the real estate will be transferred according
to that person's will or, if no will exists, according to the Law of Ontario
(if the real estate is in Ontario).
IN TRUST:
A trust situation should be discussed with a lawyer. It generally signifies
that the person who is registered on title in the Ontario Land Registry
Office is not the true, or beneficial, owner.
e.g. 'JOHN SMITH, IN TRUST"
It does not usually indicate (but it can)
on the face of the document who is, in fact, the real owner (the beneficial
owner).
PARTNERSHIP AGREEMENT:
If more than one person will be shown on title as owner and, if only one
person is providing all (or a substantial portion) of the funds needed
for the purchase, you may wish to consider entering into a special partnership
agreement to avoid any future misunderstanding with respect to distribution
of proceeds upon a resale of the property. Should you wish such an agreement
to be prepared for signature when you sign final closing documents, please
inform this office. Our fee for such a typical agreement is $50.00. One
of the features of such an agreement is to return to each purchaser whatever
cash was originally contributed by each purchaser at the time of completing
the transaction as well as any additional contributions made to improving
the property during the period of ownership (such as, new roof, finishing
basement, remodelling kitchen, new floorings, addition to house, etc.).
Other features of the agreement deal with distribution of the balance
of proceeds once the property is eventually resold and what happens if
one partner wishes to sell and the other partner does not.
|
