A joint-tenancy may be severed in three ways: in the first place, an act of any one of the persons interested operating upon his own share may create a severance as to that share. First, a joint tenant may act unilaterally upon his or her share so as to destroy the four unities. This is significant because you may have wanted to enter into a joint tenancy to effect a transfer of the whole title of the property to the other owner after you die, but without the proper supporting documents as evidence of your intentions, this may not, in law, have taken place. This could be done by simply sending the Notice of Severance to the other party in the post and asking that they sign and date the notice themselves and return it. 1996, c. 377 provides that a joint tenant may sever a joint tenancy by transferring property to himself or herself without requiring that the co-owner (s) be notified and s. 30 of the Law and Equity Act, R.S.B.C. Your intentions should be clearly documented, as discussed above. Upon termination, a tenancy in common is formed … Second, joint tenants may agree to sever by mutual agreement. This document protects the … It is beyond the scope of this article to explain all the legal complexities and individual circumstances that arise in this area of law. Joint tenants are treated as a single owner for legal purposes. A recent decision of the British Columbia Court of Appeal gives a good reminder that a joint tenant may, through his or her unilateral actions, unintentionally sever a joint tenancy, thereby converting ownership into a tenancy in common and extinguishing the right of survivorship. It may sometimes seem easier, more convenient, or simply a matter of estate planning to transfer all or part ownership of your property to another person(s), however, it is important to understand any and all legal implications before making such decisions. Upon the death of one of the tenants-in-common, their interest “passes” with their estate. Most often this occurs during a marriage breakup. If two people own property as tenants in common and one dies, the deceased person’s interest in the propert… Joint Tenancy Agreement Form. You may be a couple, group of friends, brother and sister, or parent and child, buying a house together to get on the property ladder. Also, if you die before the other joint tenant(s), your interest (ownership) in the property will, in most cases, automatically transfer (called the “right of survivorship”) to the other joint tenant(s). You need the agreement of the owners for this to happen. The right of each joint-tenant is a right by survivorship only in the event of no severance having taken place of the share which is claimed under the jus accrescendi. This is critical because, upon your death, this documentation may become the primary source of information used to determine how you intended the property to be transferred. Joint!tenancy!is!one!of!the!two!forms!of!coGownershipinexistencetoday. However, that is not the only way that joint tenancy can be severed. Reporton’Joint’Tenancy’’! make sure you clearly understand the nature of the ownership being suggested and the purpose for the suggested change in ownership; consider whether there are other ways to accomplish the same purpose,, and if the purpose is merely to give someone the ability to be able to make legal decisions about that property when you are no longer able to do so then consider entering into an Enduring Power of Attorney, because you can revoke a Powers of Attorney as long as you are still mentally capable of doing so; and. COVID-19 Notice. It is also important to be aware of this presumption if you discover, after the death of a loved one, that their property was “gifted” to adult children. If they fail to do this, it will be presumed that the adult child became an owner solely to assist with the management of their parent’s financial affairs. Further, the court found than when Janes withdrew the funds and transferred the proceeds to herself and her husband, she destroyed the unity of title in the joint ownership and hence converted the interest into a tenancy in common. That is: Note – these two documents are used to show what your intentions are regarding the ‘beneficial interest’ in a property or account. The decision in Zeligs v. Janes, 2016 BCCA 280 (CanLII) considered whether funds withdrawn from a joint bank account by one joint tenant and then transferred to herself for her own use would sever a joint tenancy. Zeligs died one year after her mother and Zeligs’ husband, as executor of Zeligs’ estate, commenced an action against Janes claiming, among other things, that the joint tenancy on the Knox Road Property had been severed when the property was sold. This means that if one of the owners dies, his or her share passes to the other owners. The Courts have long recognized that joint tenancy can be severed through a “course of dealing” which indicates the parties’ … A few months later, Mrs. Burnett died. As such, the property will pass according to the parent’s estate (according to their will or, if there is no will, according to the laws of “intestacy”). This creates a tenants in common document and will list the owners' names and the percentage of property they own. cars, bank accounts, etc), the ownership is a joint tenancy; and. Under this section the law states that if a joint tenancy is proposed to be severed by the unilateral action by one joint tenant, the Registrar-General may require provision of additional information about the other joint tenants, and the person’s efforts to contact them, before registration. A joint tenancy may be severed at the option of either joint tenant, or by mutual agreement. In effect, the law says that the person holds the property “in trust” for the property owner and that, upon the death of the property owner, the property passes according to the deceased property owner’s estate. Even though 2 or more names appear as joint tenants on a property ownership document, a joint tenancy will not automatically be created or continue in law. If you transfer the ownership as a “joint tenancy,” it means that the property is owned by you and whomever you transfer ownership to in equal proportions. with another person who is offering to help you “manage your affairs”. legal title means that the holder of the title holds the property for the true owner (the one with the beneficial interest) – for example, you may wish to give someone else legal title to your property so that they can help you manage your affairs, but not the right to use the property for their own benefit. We do not warrant its accuracy. Janes submitted generally that the withdrawal of funds from a joint account does not sever a joint tenancy. Unity of title means that the title of each joint tenant arose from the same instrument. If you have any questions about our information practices or obligations under Canada's anti-spam laws, please contact us at email@example.com. It is often prudent to enter into agreements to clearly confirm what your intentions are about the nature of the transfer. Miller Thomson LLP uses your contact information to send you information electronically on legal topics, seminars, and firm events that may be of interest to you. Severing the Joint Tenancy. Joint tenancy gives each person on title an undivided interest in the entire property. Courts cannot literally split a residential property "in-kind", for the obvious reason depi… The owner seeking severance must serve the opposing co-owners stating the intention to sever joint tenancy. Her unilateral act severed the joint tenancy and thus extinguished the right of survivorship. In other words, your interest will not “pass” with your estate and, therefore, you will not be able to give the property to other children or other beneficiaries through your will. SITUATION 3: You want to gift some of your property to your adult child prior to your death, or outside of anything that is in your will, but you have heard about a presumption in law that would undo the effect of the gift if you don’t record your wishes properly. Each joint tenant has an identical interest and holds an equal right to use the whole of the property (including the house). In arriving at its decision, the BC Court of Appeal provided an excellent summary of the law relating to joint tenancy and how a joint tenancy may be severed. Even where a true joint tenancy with a right of survivorship exists, a unilateral action by a co-owner may sever the joint tenancy. In other words, if you transfer part of your ownership in your house to another person in joint tenancy, whether a family member, friend, or someone else, that person or persons have the same legal rights to that house as you do. Considering prior case law, the court maintained that a joint tenancy may be severed and converted into a tenancy in common in three ways. The law presumes that property is held as tenants in common, which means that each owner has a fixed, divided ownership interest, whether it be 50% each or some other combination. The County Assessor felt this triggered the reassessment provisions, the assessed value of the house went up, and the property tax increased an additional $2,683 per year. Joint tenancy is most associated with its right of survivorship. Changing from Tenants in Common to Joint Tenants. Severance of joint tenancy usually occurs when one or more of the joint tenants transfer their interest to a third party, or one or more joint tenants file a petition in court to partition the property. This agreement “severs” a joint tenancy, and sets out how the sale proceeds of real property will be split between the owners. If two or more people own property as a Tenancy in Common, it does not have to be divided equally. SITUATION 2: You may think you have transferred ownership of part of your property to a relative to avoid probate, but they discover after your death that you only transferred the “legal title” and not the “beneficial interest” in the property. It also means that one owner cannot sell his or her share without the consent of the other. In Zeligs Estate v Janes , 2016 BCCA 280, an aging widow, Dorothy, transferred her home in British Columbia into joint tenancy with her daughter, Diana, after Diana and her family moved into the home with Dorothy. There’s a lot of confusing terminology, and clients are often uncertain how they hold title to their assets, including their home. As a consequence of the severance of the joint tenancy, the court decided that half of the sale proceeds from the Knox Road Property flowed to the estate of Mrs. Burnett. That is, you can give your share of the property to someone in your will, or if you die without a will, it will “pass” to the closest relative according to BC laws of intestacy (which means dying without a will) even if the person inheriting the share of property was not formerly one of the tenants-in-common. Create a new document called a deed transfer. On the other hand, if you transfer the ownership in your house as a “tenancy-in-common,” each owner holds a separate and distinct interest in the property, not necessarily in equal shares (for example, two owners might have shares of ⅓ and ⅔, or ¼ and ¾). It is important to be aware of this presumption if you want to gift your property before your death to your adult children. In her will, Mrs. Burnett provided that her three grandchildren should be given $50,000 each and the remainder of her estate should be divided equally among her two daughters, Janes and Barbara Zeligs. It simply helps clarify what your intention is. Available for PC, iOS and Android. In other words, did you transfer the type of interest (beneficial or legal or both) that you intended? In such cases the spouse will need to sever the joint tenancy and change ownership of the home from jointly owned to ownership as tenants in common. Let’s say you are the sole owner of property, such as your house, and you are considering adding another person(s) as an owner. Only joint tenants can enjoy right of survivorship. In order to create and maintain a joint tenancy, in law, there must be the existence of the following four “unities” at the time the property is transferred and throughout the co-ownership: Therefore, in law, if there is a break in one of the four unities, the joint tenancy is said to be “severed” or broken and the ownership reverts to a tenancy-in-common. ( the “ Knox Road property ” to themselves by a co-owner may sever the joint tenants agree... 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