Author: Warren Gilmore - Law Student
Edited By: Ryan Carson
Holding title to real property refers to the interest of a particular individual who has legally recognized ownership of property. More traditionally, title to real property was used to refer to an individual who has the legal right to use the property. Today, title to real property can be held in several different forums, either individually, by spouses, or even through business relationships like corporations. Whether you are buying or selling real estate, one of the final steps of the transaction involves the transfer of title of the subject property from one party to the other.
Several types of interests exist in reference to title of real property. The most common of which is “Freehold Ownership”. This category of real property ownership provides that one owns the entirety of the property, both the land itself and any dwellings occupying the land. Further, this interest in real property is freely alienable and divisible, meaning that the owner has the right to transfer his interest in the property to another party, either though conveyance or through a Will.
Alternatively, a “Leasehold” interest in real property involves the right of use and of occupancy of a particular property. However, a leaseholder doesn’t actually own the land itself, just the dwelling. Today, this arrangement typically applies to townhouse complexes and condominiums. The owner of the land can be another individual, a condo corporation, or even the government. The typical term of this type of lease arrangement is 99 years.
Further, a “Life Estate” interest in real property provides that an individual has complete use and ownership of a particular property so long as that individual is alive. The individual’s interests end automatically upon their death. As such, this type of interest is obviously not devisable. Upon the death of an individual holding a life estate, the ownership of the property will automatically revert back to the original owner of the property or shift to a third party.
Concurrent ownership is also something to consider when discussing title of real property. The two most common types of concurrent ownership that exist today are “Tenants in Common” and “Joint Tenancy”.
The “Tenants in Common” relationship provides that each tenant has an undivided and proportional interest in the property. Each party’s interest in the property is freely alienable and devisable. Further, each individual tenant has the right to use and possess the entirety of the property, even if one party has a fractional interest that is less than another. However, in the instance that the property is sold, the proceeds will be distributed according to ownership percentages.
The “Joint Tenant” relationship also provides for an undivided right to both use and possession of the entirety of the property. However, each tenant in this interest has a right to survivorship, which means that when one of the tenants die, their interest in the property dissolves and is absorbed by the living tenant. Due to the nature of this relationship one’s interest in property is not devisable, it cannot be transferred to one’s heirs via a Will. If one of the parties to a joint tenancy wishes to transfer their interest in the property, the joint tenancy is extinguished and a tenancy in common is created between the new transferee and the original tenant.
Articles written by Warren Gilmore:
Tax Concerns and Leased Properties
Chattels Versus Fixtures
Condo Purchases and Status Certificate Review
Amending Your Last Will and Testament
Trust in Real Estate Services Act
Buying and Selling Real Estate On The Same Closing Day
GST/HST New Housing Rebate
Assignment of an Agreement of Purchase and Sale Separation Agreements and the Transfer of Matrimonial Property Estate Planning for Reconstructed Families
Sale of Canadian Property by a Non-Resident
The Prudent Real Estate Investors Checklist Alternative Approaches To Purchasing A Recreational Property Power of Attorney General Overview Power of Attorney General Overview - Continued Non-Resident Speculation Tax
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