Joint Cottage Owned With Siblings: What Happens When One Dies in Ontario

A family cottage is often put in the names of several siblings. When one of them dies, the others want to know whether they keep the whole property or whether a share goes to the deceased's spouse or children.

The key question is how title is held. This article explains the two main forms of co-ownership, what each means on a death, and the steps and risks that follow.

Joint tenants or tenants in common

Land granted, conveyed or devised to two or more persons, other than executors or trustees, is held as tenants in common unless the document shows on its face that they take as joint tenants. So being on title together does not by itself mean survivorship applies.

Joint owners who acquire land by length of possession hold as tenants in common. Check the deed, because it is the document that tells you which form applies.

When survivorship applies

Property passing by survivorship goes straight to the surviving owner, whether or not there is a will. The estate does not need a probate application for the cottage in that case.

The survivors then use a land registry step, not a probate application, to remove the deceased owner's name from the parcel register. The applicant may complete Forms 42 and 43 of Regulation 690 or use statements, including that they are entitled by right of survivorship and the date of death. Appropriate proof of death is required where no death declaration was recorded.

If the death was on or after March 1, 1986, a Family Law Act statement is also needed, and only a solicitor may make and sign it. When the last joint owner dies, nobody is left to take by survivorship, so the land goes to that person's estate trustee.

When the share goes to heirs, and other exceptions

For a tenant in common, the Land Titles Act provides for entering the representatives of the deceased and for transmission to the executor, administrator or estate trustee. The share is then dealt with under the will or the rules on intestacy.

• Spouses and common-law partners are presumed to hold as tenants in common unless the deed says otherwise.
• If the cottage was a matrimonial home held jointly with someone other than the spouse, the joint tenancy is deemed severed immediately before death and the share goes into the estate. A matrimonial home is property ordinarily occupied by a person and their spouse as their family residence.
• A joint tenant can sever by deed using the statutory routes, though such a conveyance may be set aside if a fiduciary relationship or other factor prevents it.

Sale, partition and tax

Any joint tenant or tenant in common may be compelled to make or suffer partition or sale of the land. A person interested in the land may apply to the court for partition, or for sale if the court considers sale more advantageous. If you inherit a share, the other owners may therefore not be able to keep you out.

For tax, a deceased person is considered to have sold all capital property just before death, which may produce a capital gain on the final return, even if the property passes by survivorship. A rollover is available for property going to a surviving spouse or common-law partner resident in Canada. Some or all of the gain on a principal residence may be exempt. Siblings do not get that rollover, so ask an accountant what applies.

What to do next

• Get a copy of the deed and the parcel register to see how title is held.
• Find out whether the deceased had a will and who the beneficiaries are.
• Talk with the other owners early about keeping, buying out or selling.
• Ask an accountant about the final return and any capital gain.
• Have a lawyer handle the registry application and any estate steps.

Anyone can search Ontario land records through OnLand, and ServiceOntario cannot search or explain the records for you. A lawyer can read the title and tell you what it means.

Frequently asked questions