There are two types of ownership of land. Knowing how property is described on the title is very important in understanding how that property passes on death.
A “tenancy in common” is a type of ownership in which each owner holds a particular share or interest in the property. For example, if on Title to the property, a sister and a brother hold property as “tenants in common each to an undivided ½ interest,” they each own 50% of the property. If the brother dies, his ½ share becomes part of his estate and the sister has no rights to his ½ share (unless devised to her by his will, for example).
A “joint tenancy” is a type of ownership in which four unities exist: the unity of title, unity of interest, unity of possession, and unity of time. Unity of title means that all parties must have taken ownership under the same act or instrument. Unity of interest means that the interest must be the same in nature, extent, and duration. Unity of possession means that ownership relates to the same piece of property. Unity of time means that the interest of each owner arose at the same time. (Ziff, p. 312)
Joint tenancy is also distinct from a tenancy in common in that it carries with it the right of survivorship. In other words, if a sister and brother own property as joint tenants, if one owner dies, the full interest of the property passes to the remaining sibling.
Often, when spouses purchase property, they are described on title as Joint Tenants. Often, when parents want to try to avoid probate, they might transfer property to themselves and to their child(ren) as joint tenants.
For owners, it should be an important step in an estate plan to know how one is described on the title to land – whether one is a “tenant in common” or a “joint tenant” of the property.
Joint Tenancy can be severed by a number of methods. First, it can be severed unilaterally by acting on one’s own share (such as selling it, or encumbering it). Second, it can be severed by way of mutual agreement between the owners. Third, it can be severed by any “course of dealing” that sufficiently proves that all owners treated the property as a tenancy in common.
Caselaw makes it clear that “an intention to sever by one joint owner, with nothing more, does not sever the tenancy involved” (Havlik v. Whitehouse, 2001 ABCA 278).
The case of Hansen Estate v. Hansen, 2012 ONCA 112 offers a modern-day example of the legal approach to severance of joint tenancy. In this case, husband and wife owned property as joint tenants with the right of survivorship. They separated and were in the process of settling their matrimonial matter when the husband died. The wife took the position that she had a right of survivorship in the property owned as joint tenants. The husband’s estate took the position that a “course of dealings” throughout the separation showed that the joint tenancy had been severed and that the husband and wife had consequently owned the property as tenants-in-common at the time of the husband’s death. The question was: who owned the property when the husband died? Did the wife own 100% of it? Did the husband’s estate (the four children of the husband) and the wife each own half of it?
After trial, the lower court ruled that there was not a course of dealing that proved on a balance of probabilities the severance of the joint tenancy. The Court of Appeal overturned the decision and found that the pattern of conduct of the parties did show a course of dealing that proved the owners considered the property to be owned as tenants-in-common (each owning half). Although the estate ultimately won in this matter, I can imagine the legal bills to get to the “right” decision on course of dealing was very expensive for both the wife and the estate.
The take-away from this case is certainly that if you have an intention to sever a joint tenancy, take the steps to do it!
What is the easiest way to sever a joint tenancy? If all owners agree to severance, then a written agreement or an executed Transfer of Title from owners as joint tenants to owners as tenants in common will suffice. Such a transfer should be registered at Land Titles as notice to the world that the joint tenancy has been severed.
If not all owners agree to severance, one owner can serve on the non-agreeing joint owners, his or her intention to sever the joint tenancy and transfer his or her share in the property to himself or herself as tenant in common (or to a third party). Once the Registrar of Land Titles has proof of service on the other owners, Land Titles will issue a new title, describing the ownership as tenants in common.
Ownership can also be severed by way of court order. However, in order to obtain a court order severing title, the applicant would need to prove that severance has occurred by 1) agreement of the owners; 2) by one unilaterally acting on one’s own interest; or 3) by course of dealing showing that the owners regarded the tenancy as severed.
Can a Will sever a joint tenancy? A Will can be part of the evidence of a course of dealing to show that the testator dealt with the property as a tenant-in-common rather than as a joint tenant. However, if the intention from all the owners in joint tenancy is not known or understood to be a course of dealing that would sever the joint tenancy, a Will alone cannot sever a joint tenancy.
Land Titles Act, R.S.A. 2000, c. L-4, s. 65
Hansen Estate v. Hansen, 2012 ONCA 112, 2012 CarswellOnt 2051.
Havlik v. Whitehouse, 2001 ABCA 278, 2001 CarswellAlta 1408.
Alberta Land Titles. “Alteration or Clarification of Co-Ownership Arrangements – Tenancies in Common and Joint Tenancies” (November 2008), online: Introduction to Land Titles and Procedures Manual https://www.servicealberta.ca/pdf/ltmanual/TEN-2.pdf.
Ziff, Bruce. Principles of Property Law, 4th ed. (Toronto: Thomson Carswell, 2006).
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NOTICE TO READER: The summaries of legal rights and remedies described above are general references to the Alberta laws existing at the date of the publication and may not apply to the reader’s individual circumstances. Also, the laws may change. These legal summaries are not to be relied upon as applicable to your individual circumstances and are subject to a complete review of the facts and applicable laws in every case.