Immediate Severance of Joint Tenancy under the Family Law Act
This is a situation that doesn’t occur every day, but it happens enough, and real estate agents need to be aware.
Assume A, B, and C hold the property in joint tenancy. C is married to D who moves into the property such that, it becomes a matrimonial home. C then dies.
Who gets the property?
Immediately before the time of death, the joint tenancy was severed.
Ownership was divided, two thirds and one third.
A and B continue to hold their 2/3rds as joint tenants as between each other.
Their 2/3rds is held as tenants in common with C, who holds the remaining 1/3rd.
We have to look at the Family Law Act as the source for this law:
Spouse without interest in matrimonial home
Joint tenancy with third person
26. (1) If a spouse dies owning an interest in a matrimonial home as a joint tenant with a third person and not with the other spouse, the joint tenancy shall be deemed to have been severed immediately before the time of death.
Upon C’s death, his or her share will go in accordance with the provisions of the Succession Law Reform Act, meaning that:
1) if there is a Will, it will devolve as provided in the Will, and
2) if there is no Will, it will devolve as an intestacy.
Real estate agents don’t need to know where C’s interest actually goes, they simply need to know about the statutory severance of the joint tenancy.
Obviously, anyone who needs the full answer, should consult a lawyer, because there are many factors which need to be taken into consideration before a lawyer would be able to express an opinion.
However, failure to know about s.26 of the Family Law Act, could constitute negligence on the part of an agent.
Brian Madigan LL.B., Broker