What Problems Can Happen When Co-Owners Hold Property as Tenants in Common in Ontario?

Co-owners who hold property as tenants in common can run into disputes over costs, who lives there, mortgage default and how to leave, and many of these are best prevented with a written agreement. Land granted to two or more people goes to them as tenants in common unless the document shows an intention to create a joint tenancy, even if they are spouses.

Exit is often the biggest pressure point. Joint tenants and tenants in common may be compelled to make or suffer partition or sale of the land. The Court of Appeal for Ontario holds that co-owners have a prima facie right to force a sale, and the court refuses only if the applicant is acting maliciously, vexatiously or oppressively. For a mortgage, each co-owner can be liable for the whole debt.

Costs, occupancy, shares and buyouts are matters of contract, so write them down before problems start. If one co-owner stops paying, the lender must generally give notice before a power of sale, and the sale cannot happen until at least 35 days after notice. A spouse also cannot dispose of or encumber an interest in a matrimonial home unless the other spouse joins or consents, or another exception applies.