Married couples owning and living in a home together is a long-standing tradition. However, high real estate prices have many people looking for other ideas on how to get into the market. One way to make a house more affordable is to buy it as a group. This is why we are starting to see more Tenants in Common arrangements. Parent-child joint ownership is a hot new trend, followed by groups of friends buying together. Done right, this can be a viable way to get your foot on the property ladder. That said, there can be complications if one person wants to sell their share of the home later. In this blog we will answer the question “Can you sell a house under Tenants in Common?” and more.
An accurate, unbiased assessment is the foundation of your effective home-selling strategy. Start by booking your complimentary home evaluation with our experts.
Joint Tenants Vs Tenants in Common: What’s the Difference
Buying or selling real estate can be more detailed than it seems at first glance. The more people involved, the more delicate it becomes. Before going any further, let’s review the two ways your lawyer might set up the title on your deed.
Joint Tenants
What is Joint Tenants? This is the most common arrangement by far. It’s the path of choice for most married couples, but it works for any combination of people. Real estate purchases between siblings, friends or a parent and adult child can all be set up this way.
Under Joint Tenants, all owners on the title have an equal share and an equal right to possess the property. When one owner dies, their portion transfers to the surviving owners automatically.
Tenants in Common
What is Tenants in Common? A group of people buying a house together has the option to set up the title as a Tenants in Common. This allows each member to own a different share of the property.
For example, if you’re putting up the down payment when buying with a friend, you could argue that you own a 70% share and they own 30%. Tenants in Common rights and liabilities are also different when one owner passes away.
Unlike with Joint Tenants, the deceased’s portion of the property does not automatically go to the surviving owner. Instead, it transfers to their estate. After probate, this portion will go to the beneficiary named in the Will.
Selling a house can come with some challenges, but the posts below will help you rise above:
- Selling A House To A Family Member In Canada
- Can You Successfully Sell a House With a Stigma?
- Why Am I Not Getting Offers on My Home?
Can a Jointly Owned Property Be Sold by One Owner?
To better understand the advantages and disadvantages of Tenants in Common, think of what happens when and if you want to sell your share of ownership. The potential for conflict is always there.
Have you ever tried to get any group of people to agree on anything? The discussion of what toppings belong on a pizza can get heated enough, never mind the decision of when to sell a house and for how much. Under Joint Tenants, there is no choice. All parties have to be on the same page, and one person cannot sell without the others’ consent.
Tenants in Common Rights to Sell in Ontario
Separate ownership comes with some advantages. If you’re ready to move on, you don’t need anyone’s permission to sell. Under Ontario law, a Tenant in Common have the right to sell their share without consent anytime, for whatever amount they think is right.
This total separation is ideal whenever there is some distance in the relationships between owners. Between business partners or friends, it gives you more control over what you can do as a partial owner.
You can sell your share when you want to, yet no one can coerce you to sell before you’re ready. You can also transfer your portion to someone else without the other owners even knowing about it.
Getting your house ready to welcome potential buyers is always an excellent first step to selling. Learn more in the posts below:
- Worth It or Not? What Renovations Really Help When Selling Your Home
- How to Prepare Your Home for a First-Time Buyer
- Are DIY Upgrades Ever a Good Idea When Selling Your Home?
What to Know About Selling Under Tenants in Common
You now understand more of the intricacies around the question “Can you sell a house under Tenants in Common” and you know have the right to do whatever you wish with your share of the property. Just be aware that having the “right” doesn’t necessarily mean you have the ability or that it will be an easy process.
This is a common challenge that arises when one owner wants to sell but the other owner does not. Having the right to sell doesn’t help if you can’t find a buyer. And unfortunately, there might be a limited number of people who are looking to buy only part of a title.
Most buyers want to occupy the property after taking possession. This can get complicated very quickly if someone is already living in the home with no intention of moving out.
What’s the solution when a conflict like this arises? Often, you can resolve the issue with one partner buying out a Tenant in Common. This might be difficult if you’re the one who owns only 30% of the title. If you own 70%, buying out the other partner could be easier, especially if they don’t currently live in the home.
As a last resort, you could apply to the court under Ontario’s Partition Act to force the sale of the entire property. However, this is a legal situation that far exceeds the scope of this post. It’s always best to consult an experienced lawyer who can help you navigate your personal circumstances.
If all owning partners are not agreeable to a buyout, you will need to sell your individual share. This means finding a buyer who is willing to purchase only a portion of the title, which may not be an easy feat. Owner-occupiers make up the bulk of the market, but may not be your best prospects.
On the other hand, an investor or a first-time buyer who wants to grow their equity through fractional ownership may very well be interested. The trick is to find them, which presents another challenge.
This is where a local real estate agent with an expansive network comes in. A comprehensive marketing plan will be essential to your success. With the right strategy and by leaving no stone unturned, we can find a buyer in nearly any situation.
Do you have questions about selling your home in today’s market? Our top agents in Hamilton & Burlington can help you get the results you need. Reach out today with any questions you have, or call 905-332-9223 to connect with our office.
