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[BUYING AND SELLING REAL ESTATE IN CANADA - ONTARIO]
IV. HOLDING TITLE There are several ways in which title to a property can be held. Consideration should be given to the Planning Act, liability and tax planning. A buyer should consult with its counsel and tax advisors prior to determining how title will be held. When multiple parties are registered owners on title, the ownership can be as "joint tenants" or "tenants in common." Joint tenancy is used when the owners want that if one of them dies, the survivor(s) become the owner(s) by right of survivorship. Joint tenancy is frequently used by spouses for their matrimonial home. Tenancy in common means each owner owns a percentage of the registered title. If one owner dies, that owner's share is then an asset of the deceased owner's estate and may eventually be transferred to the heirs of the estate in accordance with the deceased's will or intestate laws of their jurisdiction. Individuals contracting regarding property must be 18 years old, not be incapable, and not be an undischarged bankrupt. If the party does not have such capacity, legal representatives such as estate trustees, attorneys under power of attorney, the Public Guardian and Trustee, the Office of the Children's Lawyer and others may be required to be a part of the transaction. Corporations must be authorized by resolution of its directors and, if required, shareholders. The purchase agreement and closing documents must accurately set out the names of offices of the signing officers. Real property in Ontario must be held by a legal person or corporation. Partnerships are not a legal person and therefore cannot hold registered title. Limited liability partnerships are formed under the Limited Partnerships Act. In limited partnerships, the only entity
legally capable of holding title to the real property is the general partner. Alternatively, partnerships can use a nominee, as discussed below. A nominee or trustee, usually a corporation, may hold registered title to a property on behalf of a beneficial owner. A nominee agreement or declaration of trust would stipulate the terms on which the nominee or trustee holds the property. Nominee companies offer flexibility when there are multiple beneficial owners of real estate as it allows for a single legal title holder and, for example, new joint venturers can acquire an interest in the nominee without having to register changes at the land registry office. This is also sometimes used for privacy reasons. It is mandatory for most buyers to fill out an information form disclosing beneficial owners, their citizenship/PR status, whether title is held as trustee/nominee, whether the property will be leased, and certain other information in connection with the purchase of residential and agricultural properties. The completed form is submitted electronically to the Minister of Finance and is not made public. V. TITLE INSURANCE In both residential and commercial transactions, title insurance is a contract with a title insurer that may protect the buyer and mortgagee from possible financial losses such as: • title to the estate or interest insured being held other than as shown in the policy; • any title defect and charge, lien or encumbrance on the title, including defects that may have been disclosed by an up-to-date survey;
ILN Real Estate Group – Buying and Selling Real Estate Series
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