Title Transfers in Ontario: A Complete Guide

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What Does Property "Title" Mean?

In Ontario, property "title" refers to having a legal ownership or interest in real property - in other words, the registered owner.

Title can also used to refer to the legal rights, obligations, and responsibilities associated with property ownership such as: the right to occupy, use, lease, sell, transfer etc.

What is a Title Transfer?

In its most basic sense, a Title Transfer (or Transfer of Title) is when the legal owner of a property alters ownership, either in part or entirely, by adding or removing another individual. This is slightly different than property transfers or dealing with sole owners.

Adding Names to Title

There are three common scenarios that real estate lawyers deal with when it comes to adding a name to the title of a property:

• Adding a Spouse to Title;
• Adding a Parent or Child to Title; and
• Adding a Corporation or Non-Related Third Party to Title.

Although the rules and regulations surrounding these scenarios differ, a specialized legal professional will complete the following steps to complete the transaction:

• Review the current ownership structure
• Perform a title search
• Advise of (or obtain) any necessary consents (lender/spouse etc)
• Advise whether independent legal advice is necessary
• Prepare signing documents and necessary forms
• Notify relevant parties (utilities/tax departments/title insurance companies)

Adding a Spouse to Title

Adding a spouse to the title of a property in Ontario can be motivated by several factors, including legal, financial, and personal considerations. Some of the most common reasons would be:

Refinancing the Property
Regardless of the reasons why a spouse wasn't added to title when the home was purchased, it is common practice to see a new mortgage commitment (whether its a renewal of the existing mortgage or a new one) in both of the spouses names. When a lawyer works to secure the loan to title - all names shown as a borrower on the mortgage must match the property title . This situation would require a title transfer to take place prior to the mortgage being registered.

Estate Planning
Having both spouses on title as Joint Tenants simplifies the transfer of property upon the death of one spouse, avoiding probate and ensuring the surviving spouse automatically inherits the property by way of survivorship. You can read more about Survivorship Applications and dealing with deceased owners here.

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Adding a Parent / Child to Title

Adding a parent or a child to the title of property can be motivated by various reasons depending on the family's circumstances and objectives.

Estate Planning and Inheritance
By adding a child or a parent to title, a homeowner may intend to simplify the transfer of the property upon their death. If the two take title as Joint Tenants the property would pass via Right of Survivorship - the interest in the home of the deceased would pass to the other person without falling to the Estate first.

Financial Support and Joint Ownership
Joint ownership of the property can facilitate shared responsibility for decision-making regarding the property. In situations such as refinancing, selling, and maintaining the property - one party cannot execute decisions without the consent of the other.

Being on title together would enable both parties to benefit from any increase in the property's value and share in the financial benefits.

Legal Protections
Establishing legal joint ownership would be a way to legally recognize someone's interest in the home. For example, if a parent moves into a property owned by their child and their spouse, and elects/agrees to take on financial or additional responsibilities as a homeowner, adding that parent to title helps to secure their interest in the event of there were to be disputes, separation, or divorce.

Assisting with Financing
In the event that someone is having difficulty qualifying for financing alone, adding a parent or child to title and to the mortgage may help them to meet the financial needs or obligations required.

Adding a Non-Related Party to Title

People may add non-related parties to title in order to establish joint ownership or sharing financial responsibilities. However, these types of transactions will often more closely resemble an actual purchase or sale of part of the property.

Partnerships / Business Arrangements
Individuals may add a friend or third party to the title of their home or an investment property as part of an investment agreement.

Business partners may choose to add additional names to title of a home for business arrangements such as operating business out of the premises or as an investment for the business.

Financing / Shared Living Arrangements
Sometimes, someone may want to add a friend or third party to title to assist with affordability or shared expenses. Adding an additional non-related party may help with qualifying for a mortgage or other financial products.

Friends may choose to co-own a home as part of a shared living arrangement, whether it be for companionship, reducing living expenses, or credit/equity building. With all names on title, the interest share for each person is documented.

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Removing Names from Title

When it comes to removing names from title, there are three (3) scenarios that real estate lawyers deal with:

• Removing a Spouse from Title;
• Removing a Parent or Child from Title; and
• Removing a Corporation or Non-Related Third Party from Title.

Removing a Spouse from Title

Removing a spouse to the title of a property in Ontario can be also be motivated by several factors - some of the more common reasons would be:

Separation or Divorce
In the event of a dissolution of marriage or break-up, it is common for one party to take sole ownership the matrimonial home and remove the other party from title. In some cases, this may look like a strict transfer for no consideration pursuant to a separation agreement or a court order (division of equity) or more commonly, one spouse is "buying out" the other.

Financial
In the event of a refinance, it may be that one spouse qualifies for the new mortgage where the other would not. Owning the property in one name would allow for a simplified/streamlines qualifying process.

Estate Planning
In the event a married couple does not want the home to fall to one another after the death of the other, owning the property in one name would ensure that the deceased person's interest in the home would fall to their Estate (beneficiaries) and not directly to the other party. This can also be achieved by owning the property as tenants in common rather than joint tenants.

Removing a Parent / Child from Title

Removing a parent or a child to the title of property can also be motivated by various reasons:

Financial Independence
As a person becomes financially independent, or would like to work on being independent, sole ownership of the home would allow for that person to have full control over its management and future decisions related to it. It may be that a financial planner or advisor suggests changes to the ownership structure for planning, asset building, or investment strategizing.

Family Dynamics / Estate Planning
Changes in family dynamics or relationships may influence someones decision to remove a parent or child from title such as disagreements or conflicts regarding the property, and re-establishing clear financial and/or personal boundaries.

A homeowner may choose to change their title based on new wishes when it comes to distributing future estate assets. If a parent elects to have their home go to their Estate after their death instead of directly to their child or vise versa - a child wants their home to go to their Estate and not directly to their parent should something happen to them.

Relocation or Changes in Living Arrangements
A parent or child may no longer reside in the home they are on title to - therefore title no longer reflects the current living situation.

Owning a home with a parent or child could potentially be making buying another property more difficult.

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Removing a Non-Related Party from Title

Owners may remove non-related parties to title for:

Clarity and Control
In cases where a non-related party has been added to title as a "bare trustee" removing their name from title when the time comes can provide clarity as to who the beneficial owner of the property is and would give the owner full control over matters related to the property.

Privacy Reasons
Some homeowners would prefer to keep title in the name of a friend or non-related party for privacy concerns.

Refinancing / Selling
In cases where a homeowner would like to refinance the property, if they can now qualify on their own they elect to remove the other party from title.

Having a non-related party on title could complicate the process of selling or mortgaging a home.

Relationship Changes
If the non-related party on title was initially included on title due to a relationship (friend/business partner etc.) and the nature of that relationship changes, the parties may agree to change the ownership structure of the home to reflect the changes.

Additional Considerations

The title transfer process is a complex procedure that is required to be handled by real estate lawyers and tax experts. These experts will be able to guide property owners in matters such as:

1. Land Transfer Tax;
2. Title Insurance;
3. Ownership rights;
4. Benefits and disadvantages of changing land title;
5. Trust Agreements;
6. Co-Ownership Agreements; and
7. Risks associated with being added or removed from property

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Summary

Whether it involves adding a name to a property's title or removing one, understanding the implications and procedures of a title transfer in Ontario is essential. Overall, the process of a title transfer involves both legal and financial considerations. It is necessary to seek professional legal advice from a real estate lawyer and accounting advice services from your local professional.

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