Typically, when one joint tenant of a home dies, their interest in the home passes automatically by right of survivorship to the surviving joint tenant. However, this matter can become complicated when the joint tenants are former spouses who divorced and then remarry without making changes to the ownership of a shared home. This was the issue in a recent decision before the Alberta Court of Appeal, in which a deceased’s estate had successfully petitioned to sever joint ownership in a home after one of the owners had died in order to grant 50% interest in the home to the deceased’s second husband, who was not on title.

Joint Tenancy vs. Tenants in Common

Before examining the specifics of the case at hand, it would be helpful to review the differences between taking title of a residential property as joint tenants versus tenants in common, as the two ownership models can have drastically different impacts for the owners in certain situations, such as after one owner dies.

Joint Tenancy

When two people take ownership of a property as joint tenants, they share an equal interest in the property. If one owner dies, the remaining owner is entitled to transfer the full ownership into their name by right of survivorship. This is the most common option for married spouses because it simplifies the process for transferring ownership of the home after one owner’s death and helps to avoid fees since a survivorship transfer is excluded from probate. In order to effect a transfer, the surviving owner simply needs to file a survivorship application with the Land Titles Office and, assuming there are no other registrations on title complicating the matter, the transfer will be completed.

Tenants in Common

When owners choose to go on title as tenants in common, they each own a specific interest in the property represented by a percentage. The ownership can be apportioned in any manner the parties see fit. For example, if one person were to contribute 80% of the funds to purchase the home and the other person were to contribute 20%, they can opt to apportion their ownership interests in the same manner. As tenants in common, each owner can opt to sell or gift their respective interest as they see fit. Further, there is no right of survivorship as tenants in common. Instead, the deceased owner’s interest in the property will form part of their estate and may be subject to probate.

Severance of Joint Tenancy in Alberta

If parties own a property as joint tenants, it is possible to sever the joint ownership. This can be done in one of the following three ways:

  1. Each of the owners can agree by executing a transfer or providing consent to the transfer in writing;
  2. One owner can unilaterally opt to sever joint tenancy by selling their interest to themselves or to a third party, and providing notice to the other owners; or
  3. Through any course of action on the part of the owners which indicates an intention to treat the ownership as a tenancy in common.

Two Former Spouses of the Deceased Claim Interests in Deceased’s Home

In Flock Estate v. Flock, the deceased, Arlene Flock, married her first husband, Doran Flock, in 1982. The couple purchased a home together in Calgary in 1993 and went on title as joint tenants. They separated the following year, and Doran moved out of the home. They were divorced in 1999, and that same year, Arlene’s new partner, William McKen, moved into the home. From the time he moved in, William contributed financially to the home, including the mortgage, insurance, maintenance, and utilities. William and Arlene were married in 2009 and resided in the home together until Arlene’s death in 2014. William continued to live in the home and paid all of the expenses, including the mortgage, until it was paid in full in 2017.

Arlene and Doran had made multiple attempts to resolve the contentious matter of their respective interests in the matrimonial home through litigation and arbitration, however, these attempts were unsuccessful. The issue had yet to be resolved by the time of Arlene’s death, and both Arlene and Dora remained on title as joint tenants.

When Arlene passed away, Doran attempted to remove Arlene’s name from title and transfer her interest to himself by filing a Survivorship Application. However, the change was not registered due to certificates of pending litigation registered on title. Arlene’s estate (“the Estate”) filed an application seeking an order to sever the joint tenancy and to transfer Arlene’s 50% interest to the Estate as tenants in common with Doran. The Estate also sought an order that Doran sell his 50% interest in the property to the Estate at fair market value. Doran opposed the application and instead sought a declaration that he was the sole owner of the property by right of survivorship.

Courts Find Owners had Demonstrated an Intention to Treat the Ownership as a Tenancy in Common

As part of its application, the Estate claimed that Doran and Arlene had demonstrated an intention to hold the property as tenants in common through their actions after their separation. After examining the parties’ evidence, the Court of Queen’s Bench specifically cited the following as evidence of the parties’ intentions:

  • Doran had vacated the home after the separation in 1994 and ceased any financial contribution to the home at that time. He resumed paying property taxes for the home in 2018, only after the Estate had filed the application to sever joint ownership.
  • Arlene resided in the house until her death, along with her second husband, William. During that time, the pair contributed over $230,000 to the maintenance and expenses of the home, and an additional $145,000 for renovations to the property which were made without Doran’s knowledge or consent.
  • Arlene and William purposefully had William contribute financially to the home to ensure there was a record of his contributions given the ongoing contentious litigation between Arlene and Doran.
  • William continued paying all expenses related to the property, including the mortgage, after Arlene’s death.

Courts have Jurisdiction to Operate in Equity

While Doran argued that the right to apply for severance of joint ownership had been extinguished upon Arlene’s death, the Court disagreed. The judge noted that the third ground for granting severance of joint ownership provided a court with jurisdiction to “operate in equity”. If the right to pursue severance under this ground was extinguished following the death of an owner, it would render this ground meaningless.

Given the lengthy history of the dispute between Arlene and Doran, the Court of Queen’s Bench found that it was “difficult to believe that they would have wanted the law of survivorship to apply”. The Court severed the joint ownership and apportioned the ownership equally between Doran and the Estate. The Court then ordered an appraisal be conducted on the home so the Estate could pay Doran the value of his share in order to buy out his interest. If the Estate was unable or unwilling to pay, the home was to be sold, with the proceeds being divided between the parties accordingly.

On appeal, the Alberta Court of Appeal found no reviewable errors and upheld the decision. This case affirms the fact that the third ground for severance of joint tenancy can survive the death of an owner, ensuring it remains a viable option for an estates facing similar issues going forward.

Calgary Residential Real Estate Lawyers Offering Comprehensive Services to Buyers and Sellers

Contact the experienced residential real estate lawyers at DBH Law in Calgary to see how we can help you through your next residential real estate transaction. We represent clients in a variety of real estate matters, including survivorship applications, interfamily transfers, and ownership agreements. We also have a dedicated wills and estates practice and considerable experience representing executors and beneficiaries in estate disputes as well as real property transactions as part of the probate process. We can also help with effective estate planning with an eye to avoiding unnecessary litigation down the road. To learn more about how we can assist you, contact us online or by phone at 403.252.9937.