What Happens When a Tenant in Common Dies in Ontario

A co-owner of a home has died, and you are not sure what happens to their half, third or other share. Maybe you are the surviving co-owner, or maybe you are a child or relative wondering whether the property now belongs to the person still living there.

The answer turns on one question: did the owners hold title as tenants in common or as joint tenants? The two are often confused, and the difference decides who inherits.

Tenants in common is the usual starting point

Under the Conveyancing and Law of Property Act, where land is conveyed to two or more people (other than executors or trustees), they take as tenants in common rather than joint tenants, unless the document shows an intention that they take as joint tenants.

This rule applies even where one co-owner is the spouse of another. So married couples do not automatically hold as joint tenants just because they are married. What the transfer document says is what matters.

Many people assume the survivor always takes everything. That assumption is only correct when the ownership is a joint tenancy. It helps to look at the actual document rather than relying on what the family assumed when the home was bought.

Who gets the deceased's share

When a tenant in common dies, their share becomes part of their estate. How that share is then dealt with depends on the facts of the estate, so it is worth confirming with a lawyer. The surviving co-owner keeps their own share but does not take the deceased's share just by being a co-owner.

When a joint tenant dies, the surviving co-owners inherit the deceased's share. That share does not pass through the estate in the same way.

Why this matters in real situations

Suppose two siblings bought a home together and one dies. If they held as tenants in common, the deceased sibling's share becomes part of their estate. The surviving sibling may then be co-owning with the people who inherit, such as a spouse, children or other beneficiaries.

If the document instead showed an intention to hold as joint tenants, the surviving sibling would inherit the share.

• A surviving co-owner may find themselves sharing the home with new owners they did not choose.
• Family members may expect the survivor to inherit when the title says otherwise.
• The deceased's will may matter even though the property is jointly owned, if the ownership is a tenancy in common.

These situations can be stressful, especially when the home is also someone's residence. Talking early with the other people involved, and with the executor, often helps avoid misunderstandings about who is entitled to what.

If the co-owned property is a rental

If the co-owned property is rented out, tax questions come up alongside the ownership questions. The CRA encourages landlords to report rental income and expenses on Form T776, Statement of Real Estate Rentals, although it also accepts other financial statements. Rental income is reported for the calendar year, January 1 to December 31.

Where there are co-owners, each co-owner enters only their own share of the capital cost allowance. After a death, who owns which share can change, so how rental income and deductions are split is worth confirming with an accountant or lawyer.

Points that depend on your facts

Some questions cannot be answered from general rules. How the title is actually worded, whether the deceased had a will, who the executor is, whether there is a mortgage, and whether anyone lives in the home all affect what happens next. A lawyer can read the title documents and the will and explain your position.

Also remember that a document may show an intention to hold as joint tenants in different ways. Reading it correctly is worth getting confirmed rather than guessed at.

• How is title worded on the transfer or deed?
• Did the deceased leave a will, and who is named as executor?
• Is there a mortgage, and who has been making the payments?
• Does anyone live in the home, and do they plan to stay?

What to do next

• Get a copy of the transfer or deed showing how the owners took title.
• Look for the deceased's will and find out who the executor is.
• Do not assume the survivor automatically owns the whole property.
• Keep paying the mortgage, property taxes and insurance while matters are sorted out, if you are able.
• Speak with a lawyer before selling, transferring or changing who lives in the home.

Frequently asked questions