Legally, the relationship between the co-owners of real estate is either as “beneficial tenants” or as “common tenants.” The term “tenant” is not related to a tenant under a tenancy agreement. For both leases, a co-owner may insist on a sale. In a common tenancy agreement, all owners have the same right to own the entire property; But that doesn`t mean everything is always the same. You may own 70% of the property, while your partner owns 30% – either you can use the entire property, but if you have agreed to sell the property or your part, you would be entitled to most of the proceeds. Even if you are not interested in selling the property soon, it is still important to have your agreement in writing. If there is a disagreement between you and your partner, you want everything to be written in advance, not to mention the fact that real estate transactions must be written to be legally binding. All these details can be important and you can write them with a tenant in a common agreement. Despite the frequency with which the parties have a rental relationship, the law does not provide broad protection to the parties under a common lease agreement. While, theoretically, the parties may have rights to the use and enjoyment of the property, waste and profit count, to date, the law in Canada has not developed significant precedents on which the parties could rely to seek remedies for these rights. However, when real estate is pawned as customers, all borrowers usually sign the documents. Since all members sign mortgage documents, the lender can enter the holdings of all members of the group in the event of default.
Even if one or more borrowers stop paying mortgages, other borrowers still have to pay off payments to avoid forced execution. For example, if one or more tenants want to buy the others, the property must be sold technically and the product must be distributed equitably among the owners. Common tenants can also use the legal division action to separate the property if the business is large enough to deal with this separation. In other words, tenants do not have automatic reversion rights together. Unless the deceased member`s last will specifies that his or her interest in the property must be distributed among the surviving landlords, a deceased tenant is part of his estate in the common interest. Conversely, the interests of the deceased owner are automatically transferred to the surviving owners. For example, if four common tenants own a house and one tenant dies, each of the three survivors receives an additional one-third share of the property. Most lenders require that mortgage documents contain the signatures of all parties who hold the title in a common property. In other words, you all have to borrow together. Otherwise, only a person`s landlord would act as collateral for the loan if a lender only lends the loan to a party or a “tenant.” In the event of a default, lenders would not be able to seize the entire property.
If more than one person buys a property and they do not want to leave their share to the other owner in the event of death, it is best that they own the property as a tenant. This is often the case when people buy real estate as an investment and when individuals are not related. In these situations, it is also important that the amount each individual pays and the percentage of possession that each person has before buying is carefully considered, avoiding last-minute problems. Ownership is an important issue and can be quite complicated. For more information and support, please contact a real estate lawyer.