In one of my lasts posts, I talked about "Land Ownership in BC", mainly freeholds and leaseholds… but what about Co-ownership of land?? As you may know, all of those types of ownership can be owned by more than one person...this is known as "co-ownership". All types of properties (leasehold, freehold, life estate, etc) can be owned by more than one person… this is called “co-ownership”. There are 2 types of co-ownership: Joint Tenancy and Tenancy in Common.
- Each tenant owns an UNDIVIDED property.
- Tenant MAY have separated rights (as single legal owner).
- Right of SURVIVORSHIP. When one tenant dies, the rest of the tenants become owners of that portion as a whole; until there is a sole survivor.
- Tenants can NOT leave their property to anyone in their wills.
In order to create a joint tenancy, these four "Unities" have to happen:
- Unity of TIME - all the joint tenants receive the property at the same time.
- Unity of TITLE - all the joint tenants receive their property from the same document.
- Unity of INTEREST - all the joint tenants acquire the same estate of land (e.g. freehold, leasehold, life estate).
- Unity of POSSESSION - Each joint tenant is entitled to own 100% of the property. There are no separated parts or divisions.
The joint tenancy can be terminated by:
- Severance of the joint tenancy by law (e.g. a tenant sells or mortgages the property, a new tenant is added, etc).
- By mutual agreement. All the tenants decide to terminate the tenancy.
- By an order from the court.
...when the tenancy is destroyed, a common tenancy is created with the title.
Tenancy in Common:
- Each co-owner owns a SEPARATED SHARE of the property, e.g. one tenant may own 60% and other two tenants 40%.
- NO Right of SURVIVORSHIP.
- Tenants MAY leave their property to anyone they wish in their wills. Without notifying the other tenants.
- Each tenant MAY sell or dispose of their property share.
The tenancy in common can be terminated by:
- Mutual agreement to sell one tenant's share to the other.
- An agreement of all the tenants to sell the whole property.
- An order from the court.
Check out the differences and discuss them with your partner, family or friends with whom you would like to buy a property. As sometimes, it's best for you to: sell, or you want to leave it for someone else in your will, etc. There are few aspects that you need to keep in mind for taking this decision.