There are a few reasons why you might need to transfer title or add (or remove) someone from the title of your property. For example, when you purchase a new home, the sellers must transfer the title of the house into your name. Another example would be if a homeowner wants to add a family member (usually a spouse or child) to the title of their house. In real estate, understanding the implications of title is important. Here are the 5 things you need to know about title.
 
What does “Title” Mean?
 
Title refers to the person who legally owns and has the right to use a property. The title can be held by one or more people of the same household or other. Typical title co-owners would-be partners, spouses, parents and children, and co-investors. You legally obtain the title of a property when the owners sign the deed over to you.
 
Why do You need To Transfer Title?
 
At the end of a real estate transaction, the seller must transfer ownership of the property to the buyer. You might also need to transfer title in situations of divorce, adding or removing a person from the title, or if one person on title dies.
 
What Is Title Insurance?
 
Title insurance is a policy that protects your property, either residential or commercial. This policy covers any losses related to the property’s title or ownership such as title defects, existing liens (ex. unpaid debts from the previous owner), existing trespass issues (ex. a structure of your property is on your neighbours’ land), identity theft or title fraud. In Ontario title insurance is not a requirement but your lawyer will recommend you get it.
 
Types Of Title Ownership
 
There are three types of title ownership: freehold, leasehold and life estate. Freehold ownership means you own the entire property (land and building) and as long as payments are made you are allowed to live there. An example would be a mortgaged home in which you pay your monthly mortgage payments. Once the mortgage has been paid off, you have complete control over the property when it comes time to sell.
 
Leasehold ownership means you own the property, but you do not own the land. This refers mostly to condos and townhouses.
 
Life estate ownership is the least common type of title ownership and means you have legal ownership of a property until you die. When you pass away the property transfers to the original owner or a person stated on the deed. This type of ownership is also referred to as a “life tenant”.
 
Tenant In Common vs Joint Tenants
 
When a title is held by two or more people, they are considered a tenant in common or a joint tenant. Joint tenants own an equal percentage of the property, whereas tenants in common own different percentages. When one joint tenant dies, the ownership automatically passes to the surviving owner. Only when the surviving owner dies can the property be passed to someone in their will. Under tenant in common, when someone dies, their share of the property transfers to the estate.
 
If you need to transfer the title of a property or add or remove someone from the title, you will need a real estate lawyer to help complete the process. Speak to your real estate agent about finding a trusted lawyer who can help.
 
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JOSHUA CAMPBELL (@knowledgebrkr)
Real Estate Broker
Coldwell Banker The Real Estate Centre, Brokerage
joshua@knowledgebroker.ca
249 Avenue Road • Newmarket, ON L3Y 1N8
289.231.0001