What is a "Half interest sale"?

[Guest1]

What is the deal with C3457461?

[ken0042]

Link for those who may be lazy:
http://www.realtor.ca/PropertyDetails.aspx?PropertyID=10321251

The only thing I can think of is that you would have a 50% share in the house; so if is a rental property you'd be in business with somebody else. I've looked at the rest of the neighbourhood; and this price is about 1/2 of what others are asking.

[Travis Munroe]

That is correct, you own half the interest in real estate.
Private remarks on this property say that it should be treated as an investment opportunity only.
Not easy to sell your share if you ever decided to sell. You would have to hope that the other interest in the property wants to buy you out or sell his full share to you.

[bizaro86]

Have you (or anyone) ever been involved with one of these deals? I've always wondered how it would work with the financing (is there a mortgage on it already, do you sign for the existing one, etc) and the management of the property. If it's an investment, who picks the tenants, if the other party is living there, can I charge them 50% of its value in rent?

[Travis Munroe]

honestly I have seen these deals but know very little about them.
This specific one says for investment purposes only so I assume your splitting the rental incomeand there is no option to move in.
Just doesnt seem like something that most people would want to be a part of.
Troutman is a Real estate lawyer on the board.... he would know more than I on the details with these.

[Winsor_Pilates]

I've seen them a lot in markets like Whistler where people buy into a share of ownership and split usage throughout the year. Also seen it in DT Vancouver on some hotel developments selling ownership of suites.
In both cases, there is rental/property management companies involved that help deal with running the property, splitting up costs, rent etc.

I haven't come across something like this though; a residential house in Calgary? odd

[Guest1]

I thought it sounded weird... there must be some sort of story behind it.

[troutman]

The main types of land ownership are joint tenants and tenants-in-common.

When there is a joint tenancy, the title passes to the last surviving joint tenant. You can't deal with the land without the consent of the other joint tenants.

As tenants-in-common, each owner has an undivided % interest. This interest goes to your estate, not the other tenant-in-common. You may deal with your interest without the consent of the other tenants-in-common. I presume a half interest sale, is the sale of an undivided half interest in land.

http://www.duhaime.org/LegalResources/RealEstateTenancy/LawArticle-68/Joint-and-Common-Tenancies.aspx

http://www.servicealberta.gov.ab.ca/592.cfm

There are three common types of land ownership:

Sole Ownership - either a person or a registered company is the sole owner of the land


Tenancy-in-Common - in this type of ownership there are two or more owners called tenants-in-common; when a tenant-in-common dies, that person's share in the land goes to his or her estate, not automatically to the other co-owner(s)


Joint Tenancy - this type of ownership also involves two or more owners but each owner has the right of survivorship; when one owner dies, that person's interest automatically passes to the other owner(s)

If you wish to become a joint tenant you must specify this on the transfer document, otherwise, you will automatically become a tenant-in-common.

Most married couples will own land as joint tenants. Tenants-in-common are often seen within second marriages, where spouses want to preserve their interest for their own children. Often parents will leave the cabin, farm or mineral rights to their children as tenants-in-common. Investment properties may also be owned this way by the various partners.

In this case, it appears one tenant-in-common had his interest seized by a judgment creditor. The other tenants-in-common should not be affected by the creditor.

[Travis Munroe]

^^^ Good stuff

[Kjesse]

These are interesting listings. I have only seen this kind of thing a few times. I come at this from a litigation perspective.

This suggests there is a very motivated judgment creditor. The situation is more complex than I could do justice to in a forum post.

Before placing an offer, you will want to check whether the other co-owner is the spouse of the judgment debtor and lives there. You will want to find out if that spouse claims dower rights in the other 1/2 interest in addition to co-tenant rights.

This is probably what split the "joint tenancy", which is statutory instead of intentional: (from the Civil Enforcement Act)

Severance of joint tenancy, etc.
76(1) Writ proceedings against an enforcement debtor’s interest as a joint tenant of land sever the joint tenancy when an agency has entered into an agreement to sell the debtor’s interest.
(2) If a writ is registered against land in which an enforcement debtor holds an interest in joint tenancy and the enforcement debtor dies, the writ shall continue to bind the land in an amount equal to the lesser of
(a) the amount owing on the writ, and
(b) the value that the debtor’s interest in the land would have been if the joint tenancy had been severed immediately before the debtor’s death.



There is a high probability that the co-owners are spouses, and their ownership from joint-tenancy was severed to tenants in common as a result of a judgment.

See: http://www.servicealberta.gov.ab.ca/pdf/ltmanual/TEN-2.pdf for how land titles will treat this.

There are lots of potential problems here, which will dissuade many potential purchasers. There is also the potential to make a profit with a low offer provided you can accept the legal problems.

The property being "unviewable" is common in an enforcement type procedure. Even if a spouse is not the co-owner, you will want to find out if other interests in the land have been granted (ie. leasehold interest- which does not have to registered if it is only (I think) 2 years.