Do I need my spouse’s consent to sever a joint tenancy?

BY: VALERIE DYE 

When a home is jointly owned by two persons, both parties own the entire property as opposed to each party owning half. Jointly held real estate property is convenient for the reason that it has the right of survivorship which means that if one owner dies the other owner becomes the sole owner of the property. It Is for this reason that jointly owned real estate is more common among married couples. It is not unusual for marriages to go sour. When this happens one spouse may not wish the other spouse to inherit the entire property upon his or her death. In such cases, the spouse will need to sever the joint tenancy and transfer 50% of the ownership of the home to himself or herself thereby changing the ownership from jointly owned to ownership as tenants in common.  Can one spouse transfer half of a jointly held property to himself without the consent of the other spouse or without a court order?  The answer to this question depends on whether or not the transfer is deemed as disposal of property. Section 21 of the Family Law Act provides as follows:

No spouse shall dispose of or encumber an interest in the matrimonial home unless,

1. The other spouse joins in the instrument or consents to the transaction;
2. The other spouse has released all rights …. by a separation agreement;
3. A court order has authorized the transaction or has released the property from the application under this part, or
4. The property is not designated by both spouses as a matrimonial home….

In light of this provision would a conveyance by one spouse of one half of the property from himself as joint tenant back to himself as a tenant in common be considered the ‘disposal’ of an interest in the matrimonial home? This question was answered in the Ontario Court of Appeal case of Re Horne and Evans, In that case, the husband owned a home jointly with his wife. He wanted to leave half of the property to his daughter from a previous marriage after he died. He transferred his interest in the property to himself thereby severing the joint tenancy and creating a tenancy in common with his wife. This allowed him to leave his half share of his property for his daughter in his will. After the husband’s death, the wife challenged the transfer stating that he ‘disposed’ of his interest in the property without her permission.  In its decision, the Court of Appeal held that a conveyance by one joint owner to himself as a tenant in common does not dispose of an interest since the same two parties continue to own the property but in a different manner. The only thing that changes is that the survivor does not have an automatic right to own the entire property upon the death of the other owner. The Court further stated that it was not the intention of the legislation to dictate the manner in which spouses should own their matrimonial home.

Subsequent cases such as Zeligs v. Janes further highlighted the principle that one joint owner can transfer his share of the property to himself and thereby sever the joint tenancy without the need for the other owner’s consent or a court order.

It would seem, however, that, at least in the case of the matrimonial home, transfer of one’s interest in a jointly held property to a third party is not permissible as this will result in a change of ownership.