What Happens If the Type of Ownership Is Missing from Your Deed?

Lessons from Hardy v. Estate of Louise Winters Hardy

When buying property, most people are focused on the purchase price, their mortgage terms, or the closing date. However, there is one crucial detail that is often overlooked: how the ownership is registered. This choice can have massive legal implications years later, especially when one owner passes away.

In Ontario, when two or more people purchase a property together, ownership is typically registered in one of two ways: Joint Tenancy or Tenancy in Common.

Today, we are exploring a case that answers a critical question: If the title document fails to specify the type of ownership, what does the law assume?

The Case: Hardy v. Estate of Louise Winters Hardy (2022 ONSC 1966)

In 1986, a couple purchased a property. They specifically instructed their lawyer to register the ownership as Joint Tenancy.

However, due to a clerical error by the lawyer, the deed did not specify the type of ownership at all. It remained silent on whether it was a Joint Tenancy or a Tenancy in Common.

Decades later, in 2021, the wife passed away without a will. Her only heir was their son. Following her death, a dispute arose: Did her share of the property pass automatically to her husband, or was it part of her estate to be divided under inheritance law?

Understanding the Two Types of Ownership

To understand the stakes of this case, you must know the difference between these two ownership structures:

1. Joint Tenancy

In a Joint Tenancy, there is a Right of Survivorship. If one owner passes away, their share automatically transfers to the surviving owner.

• The deceased’s share does not go through the estate process.
• No will is required for the transfer.
• The surviving owner immediately becomes the sole owner of the entire property.

2. Tenancy in Common

In a Tenancy in Common, each person owns a distinct, specified share of the property.

• If an owner passes away, their share does not transfer to the other owner automatically.
• Instead, it passes according to the deceased’s will or the rules of intestate succession.
• As a result, the heirs of the deceased may become partial owners of the property alongside the surviving partner.

What Does Ontario Law Say?

According to Section 13(1) of Ontario’s Conveyancing and Law of Property Act, if a deed does not specify the type of ownership, the legal presumption is that the ownership is a Tenancy in Common.

In other words, the law does not automatically assume the owners intended for a Joint Tenancy. Therefore, without specific language, a deceased owner’s share would typically be distributed to their heirs rather than passing to the surviving partner.

Why Did the Court Correct the Deed?

Even though the law presumes a Tenancy in Common, the court has the power to rectify a deed if there is proof that a mistake was made contrary to the parties’ true intentions. In Hardy, the court relied on three key points:

1. The Lawyer’s Error: The lawyer testified that the couple had explicitly requested a Joint Tenancy, confirming the error was theirs.
2. True Intent Was Proven: The evidence clearly showed that the couple always intended for the survivor to inherit the full property.
3. The Heirs Agreed: The couple’s son, as the sole heir, acknowledged his parents’ wishes and supported the correction of the deed.

Ultimately, the court invoked the Land Titles Act and ordered that the property be registered as a Joint Tenancy, allowing the wife’s share to pass automatically to her husband.

Why This Matters to You

This case is a reminder that property registration is never just “administrative paperwork.” Your choice of ownership impacts:

• Estate Planning: How your assets are distributed after death.
• Heirs’ Rights: Whether your family members receive a share of your home.
• Family Harmony: Preventing complex legal battles between surviving partners and other heirs.

Key Takeaways for Homebuyers

• Confirm Your Title: When you purchase a property, ensure your lawyer has registered the ownership type that aligns with your estate planning goals.
• Don’t Rely on Verbal Agreements: Even if you and your partner agree on the type of ownership, ensure it is clearly stated in the legal documents.
• Rectification is Hard: In this case, the court corrected the deed because the evidence was clear and the heir consented. In many situations, proving “true intent” or obtaining consent from heirs can be difficult, expensive, or impossible.

Summary

The Hardy case is a vital lesson in Ontario property law. While the law defaults to Tenancy in Common when a deed is silent, the court will step in to fix mistakes if the true intent of the parties can be proven.

Are you unsure how your property is currently registered on the title? It is a simple check that could save your family significant stress in the future. If you need guidance on reviewing your property title or updating your estate planning documents, we are here to help.