In BC, there are two types of property ownership structures: Joint Tenancy and Tenants in Common.
With Tenants in Common, each tenant is assigned a percentage of ownership of the property and the tenant has the legal rights to utilize that ownership independently of the other tenants. In this structure, the ownership is more similar to traditional assets – a good comparison is to owning shares of a publicly traded company. As a shareholder, you are an owner of a small percentage of the company and you have rights to the company’s assets and profits (if any), and you can choose to sell the shares to another person, use them as collateral for a loan, or write your will such that they are transferred to anyone you wish upon your death, and you can do any of these things without needing the permission of the other shareholders.
The benefit of tenants in common is that each owner can act independently of the others and can sell their ownership to an outside party (or pass their ownership through their estate to an outside party).
The drawback of tenants in common is that if the transfer of ownership occurs due to the death of an owner, the ownership becomes part of their estate and has to pass through probate, will be subject to probate and estate taxes, and if the deceased owner has not taken proper steps to ensure transfer “in whole” to a new single owner, then the deemed value of the owned stake in the property may need to be split among several beneficiaries resulting in the possible need to force the sale of the property in order to satisfy the disposition. Needless to say, the other owners of the property may not want to sell and may not be happy at the forced sale.
For the above reasons, tenants in common is typically used when buying properties as investments or for business purposes, where the owners are not family, will not be living in the property as their primary residence, and they desire the flexibility to be able to sell or pass down their ownership stake to different parties at their own discretion.
The above is general advice only, as with either form of property ownership there are significant potential tax and legal issues to consider. We strongly recommend consulting both an accountant and a solicitor before making a final decision on the type of ownership structure for any property purchase.
For more information on the other type of property ownership, see Joint Tenancy.