Real Estate Title Transfer: Purpose & How It Works

Real estate title transfer is a process in property transactions. It involves legally transferring ownership of property from one party to another.

​​​​​​​What is a Title?

In Ontario, a title refers to the legal ownership of a property. It confirms who has the right to use, sell, or transfer the property. When you own the title to a home, land, or building, it means you are the official owner as recorded in the Ontario Land Registry System.

A property title can have one or more owners and may include details about mortgages, liens, easements, or restrictions on the land. There are different types of title ownership, such as joint tenancy (where two or more people own a property together with rights of survivorship) or tenancy in common (where owners can have separate ownership shares).

To confirm ownership, a title search can be done through the Ontario Land Registry to check for any claims or legal issues attached to the property.

What Is a Real Estate Title Transfer?

A real estate title transfer is the legal process of changing ownership of a property from one person (or entity) to another. The title represents the legal right to own, use, and control the property.

Purpose of Real Estate Title Transfer

The purpose of a real estate title transfer is to formally and legally change the ownership of a property from one party to another. By recording the change of ownership in public records, the transfer provides legal recognition and protection for the new owner.

The title transfer process ensures that all financial obligations tied to the property, such as mortgages, liens, and taxes, are addressed and settled before the transfer is finalized.

What Rights do you have as a Title Owner?

One of the main rights is the right of possession, which legally recognizes you as the owner and gives you exclusive authority to occupy and use the property. This means you can live on the property, lease it to tenants, or use it for any lawful purpose that suits your needs. You can also exclude others from entering or using the property without your consent.

Another right is the right of disposition, which allows you to sell, transfer, or bequeath the property according to your preferences. This includes the ability to mortgage the property as security for a loan or to make improvements and modifications to enhance its value. As a title owner, you also have the right to quiet enjoyment, which means you can use the property without interference from previous owners or third parties, provided you comply with local laws and regulations.

These rights come with certain responsibilities, such as paying property taxes, adhering to municipal zoning bylaws, and maintaining the property in a condition that meets community standards.

Types of Titles & Ownership Structures

Each type and structure has unique legal implications, impacting how property can be used, transferred, and inherited. Below are the primary types of titles and ownership structures:

Types of Titles

1. Freehold Title: This type of title grants the owner complete ownership of the land and any structures on it indefinitely. The owner has the right to use the property as they see fit, subject to local laws and regulations.
2. Leasehold Title: In a leasehold arrangement, the owner leases the land from another party (the lessor) for a specific period, usually long-term. The lessee has the right to use the land and any buildings during the lease period, but ownership reverts to the lessor at the end of the term.
3. Strata Title: Common in condominiums and apartments, strata title provides individual ownership of a unit within a larger property while sharing ownership of common areas like hallways, pools, and gardens. Owners are part of a strata corporation responsible for managing and maintaining common areas.

Ownership Structures

1. Sole Ownership: Sole ownership indicates that a single individual owns the property, holding all associated rights and responsibilities. This structure provides complete control over the property and related decisions.
2. Joint Tenancy: Joint tenancy involves two or more individuals owning property together, each with equal shares. A key feature is the right of survivorship, where if one owner dies, their share automatically passes to the surviving owner(s).
3. Tenancy in Common: In tenancy in common, two or more individuals own property together, but their shares can be unequal. Unlike joint tenancy, there is no right of survivorship, and each owner’s share can be sold or bequeathed independently.
4. Trust Ownership: Property can be placed in a trust and managed by a trustee to benefit designated beneficiaries. This structure can provide estate planning benefits, such as avoiding probate, reducing estate taxes, and protecting assets from creditors.

How Do You Find out the Status of the Title?

To find out the status of the title, you will need a title search. The primary method for conducting a title search is through a real estate lawyer. You can hire a real estate lawyer to search the title on your behalf to initiate a title search.

The title search process involves reviewing the property’s abstract or parcel register, which provides a chronological summary of all documents and transactions affecting the property. This includes information about the current owner, previous owners, mortgages, easements, and other claims or interests. By examining these records, you can determine if the title is clear or if any issues need to be addressed before proceeding with a real estate transaction. For a thorough and accurate title search, it’s often advisable to seek the assistance of a real estate lawyer.

Can a Name be Changed, Added or Removed from the Title?

Yes, a name can be changed, added or removed from the title. Adding or removing a name from the title involves transferring ownership interest. Adding a name typically happens when adding a spouse or family member as a co-owner, while removing a name is common in situations like divorce or the death of a co-owner. A real estate lawyer must register the deed to formalize the process.

Why change the Property Ownership?

Changing property ownership can be motivated by several reasons:

Purchase and Sale of Property: The most common reason for changing ownership is the purchase and sale of property. When a property is sold, the title must be transferred from the seller to the buyer to complete the transaction.

Life Events: Significant life events are among the most common reasons for changing property ownership. Marriage, for instance, often leads to adding a spouse to the property title to reflect joint ownership. Similarly, divorce or separation may necessitate removing a former spouse’s name from the title to grant sole ownership to one party. Other life events that might prompt a change in property ownership include the birth of children, the death of an owner, or a legal name change.

Estate Planning: Property ownership changes are frequently made for estate planning purposes. For example, transferring property into a trust can help manage assets, avoid probate, and ensure that the property is distributed according to the owner’s wishes upon their death. Additionally, parents may add their children’s names to the title to facilitate the transfer of ownership upon their passing, providing a smooth transition of assets and potentially reducing estate taxes.

Financial and Legal Considerations: Changes in property ownership can also be driven by financial or legal considerations. Adding an investor or business partner to the title can facilitate shared investment in the property and clarify ownership stakes. Refinancing a mortgage might require updating the title to reflect all borrowers’ names. In some cases, removing a name from the title might be necessary to protect the property from legal claims or creditors.

Real Estate Title Transfer Steps

A real estate lawyer must perform the real estate title transfer process in Ontario. The process starts with the title search, which outlines the ownership. The real estate lawyer conducts a title search to confirm that the property is free from any liens, encumbrances, or legal disputes that could affect the transfer. The lawyer can also arrange for title insurance to protect the buyer against potential title defects. The lawyer will handle the deed registration with the land registry office.

Title Transfer Between Spouses

Title transfers between spouses are common due to marriage, divorce, or estate planning. In Ontario, this process involves transferring property ownership from one spouse to another, either by adding a spouse’s name to the title or removing it. A real estate lawyer can facilitate this transfer. In the case of divorce or separation, the transfer may involve removing one spouse’s name from the title. This process is typically part of the legal settlement and may be dictated by a separation agreement or court order. 

Survivorship Applications

A Survivorship Application in Ontario is a legal procedure used when one owner of a property held in joint tenancy passes away. In such instances, the property is automatically passed to the surviving joint tenant(s) without going through probate or being included in the deceased’s estate for distribution. This process is based on the principle of the “right of survivorship”, a feature of joint tenancy ownership.

How to Transfer Property to a Family Member in Ontario

You would need to hire a real estate lawyer to transfer a property to a family member in Ontario. The lawyer will prepare all necessary documentation and advise you on any applicable land transfer tax when transferring the property to a family member. The lawyer would conduct a title search to ensure the property is free of any liens, encumbrances, or legal disputes that could affect the transfer and initiate the title transfer process.

Summary

A real estate title transfer in Ontario involves legally changing the ownership of a property from one party to another. This process must be overseen by a real estate lawyer.

How We Can Help

Insight Law Professional Corporation is a real estate law firm located in Toronto. If you need more information on real estate transactions, contact us today and learn how a real estate lawyer can help you.

The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.