Tenancy in Common versus Joint Tenancy.

What’s the difference and why should I care.

Tony Spagnuolo, the president of www.BCRealEstateLawerys.com, explains the important difference in the following video.

Whenever you buy a piece of real estate, one of the first and most important decisions you have to make is how you wish to hold the title. In other words, you have to decide who’s going on the title and how it will be registered.

The two most common forms of ownership are joint tenancy and tenancy in common. Actually, the names are a bit confusing because you aren’t really tenants in the usual sense of the word. You certainly won’t have a landlord and you won’t have to pay rent on your house. You will be owners. However, these terms have a lot of history behind them and it would probably only confuse things worse to try to change them now.

Joint tenants, as the name implies, own property jointly. It operates in real estate much the same way as in the joint ownership of a bank account or joint ownership of any kind of asset, for that matter. The operative principle in joint ownership is that of a contingent interest (some event, in this case the death of all of the other joint tenants, has to occur for the interest to be complete) that is subject to the principle of jus accrescendi or “the right of survivorship”.

This means that complete ownership goes to the last one left alive. Alternatively said, unless you are the survivor of all of the joint tenants (there can be more than two) your rights in the property are extinguished upon death. Because the right of ownership for joint tenants (for all but the survivor) is lost on death there is nothing to go into the estate. Similarly, because the ownership expires with the owner, there is nothing to attract estate taxes, deemed dispositions (income taxes) or probate fees. This reason alone is why most married owners hold their property jointly.

The other major type of ownership of property is tenancy in common. Tenants-in-common is a different story. In this ownership, each person owns a half, or third, or some other portion that belongs only to them. Upon death, unlike Joint Tenancy, it doesn’t automatically go to the other party on title. Instead, it goes to the deceased owners estate and in the event of no will, probate.

Mark Fidgett is a Vancouver mortgage broker and the driver behind www.NotaPennyDown.com

Your Vancouver Mortgage Broker For Life
604-273-2002

www.notapennydown.com

P.S. Who’s the next person you know who wants to save thousands off their mortgage? Be sure to give me a call so we can help them! 604-273-2002