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Tenants in Common vs. Joint Tenants

Tenants in Common vs. Joint Tenants

Real estate property can be owned in various ways, with “tenants in common” and “joint tenants” being two of the most common forms of co-ownership. Both types of ownership structures have their distinct characteristics and implications. In Manitoba, Canada, the laws surrounding these ownership structures are similar to those in other Canadian provinces, but it is crucial to understand their nuances to make an informed decision when purchasing property with another party.

Tenants in Common:

  1. Equal or Unequal Ownership: One of the primary features of tenants in common (TIC) is that each owner can have a different ownership interest, which can be equal or unequal. For example, one tenant might own 60% of the property while another owns 40%.
  2. Separate Titles: Each tenant in common has a separate title for their portion of the property.
  3. No Right of Survivorship: In the event one of the tenants in common dies, their share of the property does not automatically pass on to the surviving owners. Instead, it is passed on according to the deceased owner’s will or the rules of intestacy if no will exists.
  4. Freely Transferable: Each owner can sell, transfer, or mortgage their individual interest without the consent of the other owners.

Joint Tenants:

  1. Equal Ownership: Joint tenants always have equal ownership shares in the property. If there are two joint tenants, each owns 50%; if there are three, each owns 33.33%, and so on.
  2. Single Title: Joint tenants hold a single title for the entire property, and no tenant owns a specific portion of the property separately from the others.
  3. Right of Survivorship: One of the defining features of joint tenancy is the right of survivorship. If one of the joint tenants dies, their share of the property automatically passes on to the surviving joint tenants, irrespective of any contrary provisions in the deceased tenant’s will.
  4. Transfer Requires Consent: In Manitoba, if one joint tenant wishes to sell or transfer their interest in the property, it typically requires the consent of the other joint tenants. If one joint tenant does transfer their interest, it can break the joint tenancy, turning the ownership structure into tenants in common.

Which is Right for You?

The choice between tenants in common and joint tenants largely depends on the co-owners’ intentions and relationship:

  • Personal Relationships: For couples who wish to ensure that property passes to the surviving spouse/partner automatically upon death, joint tenancy might be preferred.
  • Investment or Business Relationships: In scenarios where different parties are pooling resources to purchase a property, but each party wants to retain the flexibility to transfer their share or bequeath it separately, tenants in common might be more appropriate.

Always consult with a legal expert when making decisions about property ownership structures. Each situation is unique, and it’s essential to understand the implications of each choice thoroughly. The legal landscape can change, and while the above reflects the laws as of the last update, it’s always a good idea to get the most recent advice and information.

DISCLAIMER: This article is written for informational purposes only and does not constitute any legal advice. The views expressed are solely authors and should not be attributed to any other party, including PPD LAW OFFICE. If you need legal advice, please call our office at 204-540-0414

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