- Being on title usually gives you real legal ownership rights and risks, even if everyone agrees you are only helping out.
- A written declaration of trust may help document the arrangement, but how it works in your case is worth confirming with a lawyer.
- A joint tenant can have a prima facie right to force a sale under the Partition Act, and a surviving joint tenant takes the property by survivorship.
- Land transfer tax, spousal rights and estate rules can all apply, so get legal advice before signing or before changing title.
It is common for a parent, relative or friend to go on title to a home so that someone else can qualify for a mortgage. Everyone understands that the real owner is the family member who will live in the home and make the payments. The person on title thinks of themselves as a helper, a nominee.
The land registry does not record that understanding. This article explains the main risks of being a nominee in Ontario, how a declaration of trust can help, and what to ask a lawyer first. It is general information, and your situation may call for different steps.
Why being on title is more than a favour
When your name is on title, other people dealing with the property, such as lenders, creditors and buyers, generally look at the registered owners. A transfer of any interest in freehold land requires an execution search against the registered owner or owners before registration. That means debts or judgments against a person on title can matter to the property, even if you only hold title as a favour. How far that goes depends on the facts and the paperwork, so ask a lawyer.
If you are also asked to sign the mortgage, what that means for you depends on the documents and the lender, so it is worth confirming with a lawyer before you sign. Whether a lender needs to be told the full arrangement is also a question to raise with a lawyer before anything is signed, because a misunderstanding with a lender can be serious.
It can also affect your own plans. Being on title to a property may matter when you later apply for credit or look at buying a home yourself. Ask your mortgage professional how it is treated.
How the way you hold title changes the risks
Joint tenancy includes a right of survivorship. Tenancy in common does not, so a deceased tenant in common's interest does not pass automatically to the other owner and falls into the estate. If the nominee dies while on title as a joint tenant, the survivor can apply for survivorship, but a surviving joint tenant's application is supported by statements that only a solicitor can make.
Joint tenants also have a prima facie right to force a sale under section 2 of the Partition Act. The person resisting the sale must show why the property should not be sold, and a court refuses only if satisfied the person seeking sale is acting in a malicious, vexatious or oppressive fashion. How a disagreement between a nominee and the real owner would play out depends on the facts and the paperwork, so it is worth confirming with a lawyer.
| Way of holding title | What to know |
|---|---|
| Joint tenants | Right of survivorship applies; each joint tenant may have a prima facie right to force a sale |
| Tenants in common | No survivorship; a deceased owner's interest falls into the estate |
| Changing between the two with the same parties | Not a conveyance, so the consideration is nil |
If the nominee is married, spousal rights may also come into play. For a death on or after March 1, 1986, a survivorship application must be supported by a Family Law Act statement, and a joint tenancy between a spouse and a third person in a matrimonial home is deemed severed immediately before death.
Using a declaration of trust
A declaration of trust is a written document that tries to record the arrangement between the nominee and the real owner. It is a good idea to have it prepared at the time the property is purchased, not later.
A trust can be recognized for land transfer tax purposes. Conveyances between a trustee and the beneficial owner where beneficial ownership has not changed since the transferor obtained registered title are taxed at nil consideration, and the Ministry can later ask for evidence of the trust. Because of that, keep the signed document and records of who paid what.
A declaration of trust does not fix everything. How it applies to a lender, a creditor or a spouse depends on the documents and the facts. A lawyer can explain what it can and cannot do in your case.
Land transfer tax if title changes later
When the nominee later transfers title to the real owner, the tax result depends on whether any consideration passes. A gift of land is not exempt from land transfer tax as such, but if no consideration passes in any form, no tax is payable. An outstanding mortgage is taxed as consideration regardless of the relationship between the parties, except for certain spousal transfers.
This means a transfer out of a nominee's name that leaves a mortgage in place may still produce a tax bill. Whether the transfer is a true nil-consideration trust transfer or a transfer with a mortgage to be taken on needs to be worked out before registration.
What to do next
- Talk to a lawyer before you sign a purchase agreement, mortgage or transfer as a nominee.
- Ask how the lender and the title insurer treat the arrangement, and what you must disclose. Confirm this with the insurer and your lawyer.
- Put a signed declaration of trust in place and keep payment records.
- Review wills, because a nominee's death can leave the interest to pass by survivorship or into the estate, depending on how title is held.
- If the other person will not sign a later transfer, ask a lawyer about whether a court vesting order may be an option.
- Plan any transfer of title with the land transfer tax in mind.
Frequently asked questions
Can I just remove my name from title later?
Usually it takes a registered transfer, which is done by an authorized user such as a lawyer. If a mortgage remains on the property, land transfer tax may apply to it as consideration. The lender may also have to agree, so ask your lawyer first.
What happens if the person I helped will not cooperate?
It depends on the facts and documents. Land registry guidance contemplates a court vesting order, which uses the word vest and states the full name and date of birth of the party in whom the land vests. A lawyer can tell you whether that, or another route, fits.
What if I die while on title?
If title is held as joint tenants, a survivorship application can be made, supported by statements that only a solicitor can make. If you hold as tenants in common, your interest falls into your estate.
Does a family transfer for no money mean no land transfer tax?
Only if no consideration passes in any form. Assuming a mortgage counts as consideration, whatever the relationship between the parties, except in certain spousal cases.
Sources
- Ontario.ca – Transactions with Nominal Consideration — ontario.ca
- Ontario.ca – Conveyances Involving Trusts — ontario.ca
- Ontario.ca – Register land documents electronically — ontario.ca
- Ontario Land Registration Bulletin 2000-6 – Estate documents — ontario.ca
- Ontario Land Registration Bulletin 86001 – Family Law Act, 1986 — ontario.ca
- Inniss v. Blackett, 2022 ONCA 166 — ontariocourts.ca
- Ontario Land Registration Bulletin 2024-02 – Court Orders — ontario.ca
- Ontario Land Registration Bulletin 98003 – Writs of Execution — ontario.ca
Links go to official government, court and regulator pages. The law changes — confirm you are reading the current version.
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