When you buy property in British Columbia with another person—whether it’s a spouse, a business partner, or a family member—you have to make a critical legal decision: how will you hold the title? In BC, co-owners generally take title in one of two ways: as Joint Tenants or as Tenants-in-Common.
While these terms sound similar, the legal distinction is profound. Your choice determines who owns the property after a death, whether probate fees will apply, and how much control you have over your share of the real estate.
Joint Tenancy: The “Right of Survivorship”
Joint tenancy is the most common arrangement for married couples or committed partners. In this structure, all owners hold an equal, undivided interest in the property. The defining feature of joint tenancy is the Right of Survivorship.
Legally, this means that upon the death of one owner, their interest instantly vanishes, and the surviving owner(s) automatically inherit the entire property. The property does not pass through the deceased’s Will, which means it generally avoids the estate administration process (probate) and the associated fees.
- The Advantage: It simplifies the transfer of title. The survivor simply files a transmission application with the Land Title Office.
- The Caution: You cannot leave your share to someone else in your Will. If you are a joint tenant, “survivorship” overrides your Will. Furthermore, adding a non-spouse (like an adult child) as a joint tenant for “convenience” can be risky. It may trigger capital gains tax, expose the home to the child’s creditors, or lead to complex legal disputes where courts presume the child holds the property in trust for the estate (a “resulting trust”).
Tenancy-in-Common: Distinct Shares and Control
Tenancy-in-Common is strictly about ownership percentages without the automatic right of survivorship. In this arrangement, each owner holds a distinct, separate share of the property. These shares can be equal (50/50) or unequal (e.g., 60/40) to reflect different financial contributions.
If a Tenant-in-Common passes away, their share does not go to the other owner. Instead, it becomes part of their estate and is distributed according to their Will.
- The Advantage: This structure offers flexibility and control. It is ideal for business partners, friends buying together, or blended families who want to ensure their share of the asset passes to their own children rather than the co-owner.
- The Caution: Because the share passes through the estate, it typically requires a grant of probate to transfer, which attracts probate fees. It also requires a well-drafted Co-Ownership Agreement to handle disputes, as you are essentially business partners in the property.
Changing Your Mind: Severance
It is important to know that these structures are not necessarily permanent. A joint tenancy can be “severed” and converted into a tenancy-in-common. In BC, a joint tenant can even do this unilaterally—by registering a transfer of their interest to themselves—without the consent of the other owner. This is often done during separation proceedings or estate planning updates to ensure that a half-share of the house can be left to children rather than an ex-spouse.
Conclusion
The choice between Joint Tenancy and Tenancy-in-Common isn’t just a box to check on a form; it is a strategic decision that affects your taxes, your estate plan, and your family’s future. For spouses, joint tenancy usually makes sense; for investors, tenancy-in-common is often the safer bet.
Because every relationship and financial picture is different, you should select the structure that aligns with your specific goals. Please consult with Northam Law Corporation to ensure your ownership structure is set up correctly from day one. You can reach us directly at 604-630-2350 or via email at melissa@northam-law.com to discuss your purchase.
** The information in this article is for general informational purposes only and does not constitute legal advice. Laws can and do change over time and every legal situation is unique. You should consult with a qualified legal professional, such as the team at Northam Law, to obtain advice tailored to your specific circumstances before making any decisions.
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