When two or more people own a property together and wish for the property to pass to the remaining owner(s) upon the death of one or more of the owners, they may purchase property under what is known as a joint tenancy. In such an arrangement the owners have equal rights and obligations to the property. But as relationships change, so to may a desire to maintain a joint tenancy. Meanwhile, a tenancy in common is a situation where two or more people might own property together, but when one of those people dies, their share of the property becomes part of their estate. A recent decision from the Ontario Superior Court of Justice looks at how joint tenancy can be revoked, and more particularly, how it might be done unilaterally.

Revoking a joint tenancy

The ways in which joint tenancy can be severed were established in a 2012 decision from Ontario’s Court of Appeal. The three ways, known as “the three rules” are as follows:

Rule 1:  unilaterally acting on one’s own share, such as selling or encumbering it;

Rule 2: a mutual agreement between the co-owners to sever the joint tenancy; and

Rule 3:  any course of dealing sufficient to intimate that the interests of all were mutually treated as constituting a tenancy in common.

The first two rules are fairly straight forward and clear. However, the third rule leaves things open to some ambiguity. In the case being discussed today, the parties agreed that it was the third rule which would apply if the joint tenancy was actually severed.

Inconsistencies with joint tenancy and the will

The husband and wife were married in 1999, though the husband had three children from a previous marriage. They purchased their home together, registering themselves as joint tenants. The husband passed away in 2015.

Upon the husband’s death, his will was read and was found to contain language stating the wife would be allowed the “use, occupation and enjoyment of my one-half interest” in the home. The 2012 decision from the Ontario Court of Appeal noted that a testamentary disposition as seen here is not enough to sever a joint tenancy. However, it can be used to help discern whether there existed a common intention (between the owners) to seer the joint tenancy. This is where the recording of the husband and wife comes into play.

The recording

A recording that was said to have taken place (according to a sworn affidavit) between the husband and wife with the children present (though that was in question). In the recording, the wife is heard saying that she understands that the husband’s share of the house will go to his children upon his death.

In addition to this, the court also heard evidence that a friend of the husband told her of the intent to leave his half of the home to his children. The wife and one of the children were present during this conversation.

The court found that looking at the evidence as a whole, it was clear that there was a common intention to sever the joint tenancy. The will alone would not have been enough to do so, but the addition of the recording and the evidence of the conversation with the friend combined top provide sufficient evidence.

If you are thinking about challenging the will of a family member or friend, the results-oriented, effective estate lawyers at NULAW in Toronto can help. Contact us online or at 416-481-5604 before you take any action. We will help you navigate your options and formulate a pragmatic game-plan for moving forward.

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