Missing in Action: Joint Tenants and the Absentees Act

The Problem

What happens if one of the owners of a property goes missing?

In this hypothetical case, a husband and wife owned their family home as joint tenants, as is commonly done with spouses.  Unfortunately, due to extenuating circumstances, the wife was deported from Canada and had to return to her home country of Colombia, leaving her family here. Despite the best efforts of the family, they did not hear from the wife for multiple years – having no idea where she was.

As time passed, the family’s mortgage reached maturity and the family was required to refinance the home. However, without sign-off from both husband and wife, the joint tenants, the family was unable to obtain the required financing and now faces losing their home despite making all of their mortgage payments on-time and without issue.

How can the family refinance their home?

Potential Solutions

1) Right of Survivorship

If the family knew that the wife had passed away and had evidence of that (such as a death certificate), ownership of the home would pass automatically to the husband based on the right of survivorship.

Without such knowledge, the family is likely forced to seek the court’s intervention, but the question remains: what can the court do?

2) Declarations of Death Act

If the family merely suspected that the wife had died, the family could bring an application before the courts under section 2 of the Declarations of Death Act for a declaration that the individual has died.

There are two tests for a declaration of death.

The first requires a disappeared in circumstances of peril:

1. the individual has disappeared in circumstances of peril;
2. the applicant has not heard of or from the individual since the disappearance;
3. to the applicant’s knowledge, after making reasonable inquiries, no other person has heard of or from the individual since the disappearance;
4. the applicant has no reason to believe that the individual is alive; and
5. there is sufficient evidence to find that the individual is dead. 

The second requires disappearance for more than seven (7) years (no peril is required):

1. the individual has been absent for at least seven years;
2. the applicant has not heard of or from the individual during the seven-year period;
3. to the applicant’s knowledge, after making reasonable inquiries, no other person has heard of or from the individual during the seven-year period;
4. the applicant has no reason to believe that the individual is alive; and
5. there is sufficient evidence to find that the individual is dead.

Both tests require that the court be satisfied that there is “no reason to believe that the individual is alive” and that reasonable inquiries have been made to attempt to find the person.

However, what happens when the person has not disappeared for 7 years and did not disappear in circumstances of peril?

3) Absentees Act

Thankfully, the Absentees Act may be available to provide assistance to our hypothetical family.

Under section 2 of the Act, the court can make an order declaring a person to be an “absentee” if it is shown that “due and satisfactory inquiry” has been made to ascertain their whereabouts. The Absentees Act requires that the person had to previously have his or her usual place of resident or domicile be in Ontario.

Importantly, there is no requirement to believe that the person is dead, merely that they have disappeared, their whereabouts are unknown. If the court is satisfied that the missing person is, indeed, an Absentee under the act, the court may appoint a committee to administer the property of the absentee.

Finally, section 8 directly deals with the hypothetical posed above. Where the absentee has an interest in land in Ontario, the court can appoint a committee to manage, sell, or otherwise deal with the absentees interest in the land as long as such dealings are, in the eyes of the court, in his or her best interest and in those of his or her family.

Conclusion

While the disappearance of a loved-one is a very traumatic experience, it is comforting to know that legislation is in place to assist those in need to move forward with their lives and transact accordingly.

At Mills & Mills LLP, our estate lawyers can assist you in building an estate plan to best suit your circumstances and needs. To learn more about how we may be able to assist you please reach out to us online or by telephone at (416) 863-0125.