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The Briar Hill Group

Types of Ownership in Real Estate

Buying a Home with a Friend? Here’s Info on Different Types of Ownership

OWNERSHIP OF THE NEW PROPERTY:- There are two types of ownership. talk to your lawyer about how you want to handle it. Here are examples where A and B buy a property together. For those coming into a property from previous relationships that have children, this topic is something to be considered seriously as it'll affect your children directly.

Joint Tenancy: This type of ownership is common in marriages. If one of you dies, the other gets the property automatically without the property having to go through probate. This means if A dies then her half would go automatically to B who is the other owner. Even if A has children separate and apart from B, the property would go to B automatically.

Tenancy in Common: This type of ownership would be common in mutual investments on property. i.e. Two people who want to purchase single family home together, but who want to ensure that they can direct the proceeds of the property to whomever they wish should they pass away. So, if A passes away, she can pass the percentage ownership through her will, to her children. The half ownership does not go to the other original purchaser automatically. You also need to set the percentage ownership at the time of purchase... 50/50; 60/40 etc.

It is important that you talk to the lawyer about how you will go about owning the property as well as the procedure for sale or disposal of the assets should you pass away or if one of you wants to leave the property. Some questions to ask each other are: Are you going to give the other first chance at buying your portion out? Will there be a timeline involved in making and then accepting of the offer? Can the sale price be tied to a property assessment from a Appraiser? What is the recourse if you don't like the appraiser's outcome?

Agree to all of this while you have a rosy perspective on your purchase and each other.

Here is an excellent article for further reading: http://estatelawcanada.blogspot.com/2010/01/joint-tenants-vs-tenants-in-common.html


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About Jane Johnston Personal Real Estate Corporation M.E

Jane Johnston was a winner of an VREB MLS® Silver Award in 2007 and 2008 and 2010, and MLS® Gold Award Winner in 2010. Jane was Pemberton Holmes' top new REALTOR® in her first year and has consistently been a top 1% performing realtor at Pemberton. Jane is focused on providing you with top-rated service.