Buying a Home With a Friend in Ontario: Joint Tenants or Tenants in Common?

Buying with a friend, a sibling or a partner you are not married to is common, especially when one income is not enough. Before closing, your lawyer will ask how you want to hold title. The answer affects what happens if one of you dies, how shares are split and how hard it is to leave.

This article explains the two main ways to hold title in Ontario, what the law assumes if you say nothing, and what can happen if one owner wants out. It is general information, not advice on your situation.

The two ways to hold title

When two or more people own land together, they hold it either as joint tenants or as tenants in common. The difference is in what each owner has. Joint tenants hold the property together as a single unit, and when one dies the survivor takes the whole. Tenants in common each hold their own separate share. What happens to that share when an owner dies depends on your situation, so it is worth confirming with a lawyer.

When land is granted to two or more people, Ontario treats them as tenants in common unless the document clearly shows they are to take as joint tenants, and this applies even if the owners are spouses. That presumption does not apply to executors or trustees.

Which one suits friends?

Friends who contribute different amounts often prefer tenants in common, because shares can match what each person put in. It also lets each owner leave their share to their own family rather than to the other owner. Joint tenancy can make sense if you truly want the survivor to keep everything, but it is a significant choice, so it is worth confirming with a lawyer how it fits with your wills.

If you want joint tenancy, the document needs to say so clearly, because silence defaults the other way. If you want unequal shares, say so in writing and also record who paid what. Title alone does not explain your arrangement.

• Do you want the survivor to keep the whole home, or should each share go to your own family?
• Will you each pay the same amount toward the down payment, mortgage and repairs?
• What happens if one person cannot keep up their share of payments?
• Is either of you married, or in a relationship where family law could affect the home?

Family law can change the picture

If one co-owner is married and the home is their matrimonial home, a spouse generally cannot dispose of or encumber an interest in it unless the other spouse joins in or consents, or another listed exception applies. If a spouse dies owning a matrimonial home interest as a joint tenant with someone other than their spouse, the joint tenancy is deemed severed immediately before death, so survivorship does not operate. A co-owner's marital status can therefore matter to you, so raise it early.

If one owner wants out

Anyone with an interest in Ontario land may bring an action or application for partition of the land or for its sale, and joint tenants and tenants in common can be compelled to make or suffer partition or sale. That means one unwilling co-owner cannot always block an exit forever.

Where jointly held land passed by will or intestacy, no partition proceeding may be taken until one year after the death. Whether a court will actually order a sale depends on the facts and on case law, so get advice before relying on either side of that right.

Court is slow and costly, so most friends are better off agreeing in advance how a buyout, a sale and a dispute will be handled. A written co-ownership agreement is a contract, and its content is up to you.

Partnership and trust questions

Owning property as joint tenants or tenants in common does not by itself create a partnership, even if you share profits from the property. A partnership exists where people carry on a business in common with a view to profit. This matters if you plan to renovate and flip or run a rental as a business, because in a general partnership each partner can bind the firm and is jointly liable for its debts. That joint-liability rule is subject to the limited liability partnership provision.

If one person is on title only to hold it for someone else, the arrangement may be a bare trust, which CRA describes as one where the trustee is essentially an agent for the beneficiaries. Bare trusts do not have to file a T3 return or Schedule 15 for taxation years ending on or after December 31, 2024 and before December 31, 2026, but reportable bare trusts may have to file for later years. Some arrangements are excluded, such as a parent on title so a child can obtain a mortgage, and related persons holding their principal residence. Check with an accountant if this could apply.

What to do before you sign

• Decide how you will hold title and make sure the transfer says so clearly.
• Write down each person's contribution and the share each will own.
• Prepare a co-ownership agreement covering buyouts, sale and disputes.
• Update your wills so they match how you hold title.
• Ask a lawyer about family law, tax and land transfer tax issues for each owner.

Frequently asked questions