This page illustrates the process and documents required for a severance of joint tenancy after bankruptcy of a joint tenant.

Background

Joint tenants will appear on one title. The process for transmission of a title in the event of bankruptcy involves a number of steps, and will not be as straightforward as it is in cases where the title has a single owner (even, for example, if the owner who has gone bankrupt holds as a tenant in common).

Process

To effect a transmission:
 
Submit a packet containing the following applications:

• One Surrender of the title in the name of the joint tenants. As authorization submit either the Assignment in Bankruptcy, the Certificate of Appointment or the Receiving Order. 
• One Setup as a tenant in common to the bankrupt former joint tenant - the fractional ownership share in the parcel will depend on the number of joint tenants involved in the surrendered title (in the "normal" case of two joint tenants, the fractional share will be 1/2).
• One Setup as a tenant in common to the other former joint tenant. Note that if there are more than two joint tenants on the title, you should be setting up the remaining joint tenants on a single title, as to the remaining undivided interest of those joint tenants (e.g. if originally three joint tenants, the title set up in the name of the bankrupt should be for a 1/3 fractional interest in the parcel; the title set up in the names of the remaining two joint tenants should be for a 2/3 fractional interest in the parcel).
• One Transmission transmitting the bankrupt tenant in common title to the Trustee in Bankruptcy, including as authorization the Assignment in Bankruptcy, the Certificate of Appointment or the Receiving Order.
  • In a situation where more than one of the joint tenants has gone bankrupt, you would set up individual tenant in common titles (as to the relevant fractional share) for each such bankrupt, then submit separate Applications for Transmission of these titles to the Trustee in Bankruptcy. For each such application, the Assignment in Bankruptcy, the Certificate of Appointment, or Receiving Order as to the specified bankrupt must be included as the authorization in support of the Application for Transmission.

You may complete the transfer(s) and transmission(s) in one packet provided that you follow the proper procedure. Please note that before submitting any packet which results in a title being 'transferred' twice in one packet as 'transferred' is defined in The Land Titles Act, 2000, you should notify us at [email protected]  with your packet number. The exception to this requirement is where the transaction is the transmission of a title of a deceased person to the personal representative accompanied by a transfer to a third party. In that circumstance a notification is not required.

With respect to completing the documentation, each of the titles being set up in relation to the surrender of the joint tenancy title should indicate the corresponding fractional share in the fair market value of the parcel. For example, in the normal situation of two joint tenants, if parcel value is $50,000, then each new title - one in the name of the bankrupt, the other in the name of the other former joint tenant - should have a value of $25,000.

On the Application(s) for Transmission, cross out Title Number and insert Application Sequence Number instead. For example, in a case where, after the surrender of the joint tenancy title, the first title set up is in the name of the bankrupt and the second in the name of the other former joint tenant, the 4th application will be the Transmission. The Title Number field appears near the top left hand corner of the form. Cross out the words "Title Number" and insert the words "Application Sequence Number", then complete the field with the number "2." This will tell us that you are transmitting to the Trustee in Bankruptcy the first tenant in common title that has been set up (the second overall application in the packet). If more than one of the original joint tenants is bankrupt, the same process on any subsequent Application for Transmission should be followed, with the Application Sequence Number corresponding to the number of the Application that set up the bankrupt's tenant in common title.

This process will result in the Trustee in Bankruptcy holding tenant in common titles to the property for each bankrupt. This will maximize flexibility for the Trustee. Should the Trustee wish to simultaneously transfer the titles at some point, this may be accomplished by surrendering both titles on the same Application, and setting up a single title as to the relevant fractional share in the parcel in the name of the new owner.