For parents hoping to pass on the family home while avoiding probate fees, joint tenancy can look like an elegant solution, but it can also prove to be a costly mistake.
Adding a child to title is one of the more popular real estate transactions in Ontario, especially among elderly parents who want to reduce the probate tax burden on their intended heirs by facilitating a transfer outside their estate after death.
But joint tenancy is also an increasingly common source of real estate litigation involving parents who change their mind after falling out with a child over the control, maintenance or sale of jointly held property that was once theirs alone.
Unwinding a regretted transfer is not so simple, as one elderly mother recently discovered when she challenged her adult son’s ownership interest in an effort to regain sole ownership of her home. Their case was the subject of Ontario Superior Court Justice Jasmine Akbarali’s recent decision in Ramotar v. Ramotar.
The facts
The 88-year-old mother at the heart of the case bought the home with her husband in 2009. Their son moved in five years later, after his mother became visually impaired. She subsequently appointed him as her attorney for personal care.
Following the death of her husband in late 2021, the mother transferred the home to herself and her son as joint tenants. However, their relationship deteriorated in the following years to such an extent that police intervention was required on more than one occasion.
In 2024, the mother advanced several claims challenging the transfer, in the hopes of restoring her as sole registered legal and beneficial owner of the home.
In arguments before the court, the mother alleged that her son had exercised undue influence over her to obtain the interest in her home, that he had threatened to put her in a nursing home and that his share of the property was subject to a trust in her favour.
The results
The judge ultimately sided with the son, dismissing all the mother’s claims related to his ownership interest in the property.
There was no basis for the mother’s allegations of undue influence, Justice Akbarali concluded, writing that the mother was the one who had arranged the appointment with the lawyer who carried out the transfer and that she had entered the transaction “of her own full, free, and informed thought.”
Although the judge accepted that the presumption of resulting trust applied to the transfer, which was made for no consideration, the son had successfully rebutted that presumption, Justice Akbarali added.
After reviewing the evidence, the judge found it was clear that the mother’s intention was to gift him an interest in the property, with a right of survivorship.
In addition, while the court is empowered to grant vesting orders, the judge wrote that they “are not a mechanism to withdraw a gift that one regrets giving. Gifts are not revocable.”
Despite her defeat on the ownership issue, the judge expressed concern about the woman’s living circumstances.
“She should not be forced to live out her advanced years in such stressful circumstances,” Justice Akbarali wrote, noting that her ruling was made without prejudice to her ability to apply for his eviction on grounds “other than his alleged lack of ownership interest in the Property.”
The lessons
Probate fee savings may sound like a good case for joint tenancy with a child, but there are plenty of reasons to think twice before executing such a transaction.
As this decision demonstrates, a joint tenancy can be difficult to unwind, potentially leaving the parent with less control over the property.
Ontario courts have also repeatedly reinforced the prima facie rights of a joint tenant to force the partition and sale of a property under the province’s Partition Act, while the child involved could also forfeit any first-time buyer benefits that would otherwise be available to them by going on title.
Depending on the family’s circumstances, the risks of joint tenancy may outweigh the benefits, particularly when the arrangement is likely to remain in place for many years.
In this case, the mother’s effort to reverse a regretted joint tenancy was not only a fruitless endeavour, but also an expensive one. According to the ruling, her partial indemnity costs for the motion came in around $58,000, which would put her actual legal fees closer to $100,000.