With property, don’t just look at the title

In real estate, two “levels” of ownership are legally recognized. The first is found on a title. The registered owner (or owners) have what is called “legal” title.

The second level of ownership, called “beneficial” ownership, is mainly based on a person’s contributions (in many ways) to the property.

In the recent case M.J. v. M.W., the Court had to consider what a separated husband, not registered on title (to two properties), was entitled to. Titles to the properties were registered in the wife’s and her mother’s names.

It appears that was done because the wife’s parents had contributed to the down payments, and the parents did not trust the husband. But over several years, the husband did a lot of renovation and repair work on both properties, and made mortgage and other payments.

In the end, the Court awarded him a one-third interest in his residential property and a half-interest in the other (rental) property.

In my opinion, the husband should have sought legal advice before agreeing not to go on title. There are steps a couple can and should take in buying a property when parents help financially with the purchase.

This case was properly decided given the husband’s contributions over the years, but the husband took risks in not getting on title in the first place.

This ad ran in the Richmond News on May 20, 2016.