Forcing the Sale of Real Property
In many situations, separating couples will have different opinions with respect to a home they own either jointly or as tenants in common. It’s not unusual for one party, typically the party that has moved out of the house at or shortly after separation, to want the property listed for sale, while the other party does not see any benefit to pushing the issue forward and would prefer to be able to stay in the house while all issues are resolved, rather than sell to a third party.
In Ontario, property can be owned by a couple as either joint tenants (meaning they both own 100% of the property, and if one of the parties dies the survivor becomes the sole owner of 100% of the property through a “right of survivorship”) or as tenants in common (meaning that each party owns a specified amount of the property – sometimes 50% each, sometimes different shares, and there is no automatic right of survivorship). Either way, someone who co-owns property can apply to the court for an order requiring that property to be sold.
Family law cases frequently get resolved as a whole, rather than piecemeal. Typically, parties will be working to resolve the ownership of the home, property issues, child and spousal support, and parenting issues, all at the same time. There is often a delay in getting a property transferred from one spouse to the other, or putting a property on the market for sale to a third party. The party who has moved out will want his or her equity from the property in order to meet other financial obligations or to purchase a new house for themselves. The party remaining in the home will not face the same pressure. The party wishing to sell the home may bring a motion to have the court order that the property be sold, and this type of motion is frequently successful.
These motions for sale can include a lot of specific detail about how a property actually gets sold: the listing price, whether both parties need to sign a listing agreement with a real estate agent, what will happen to the proceeds of sale, what repairs need to be done before listing, how showings will be managed, and other logistical details. Parties occupying homes can be ordered to keep the home presentable for showing, to preserve the home and its contents, and generally cooperate with the sale. Depending on the specifics of the case your lawyer will recommend what particular elements you will need to focus on. Cases where a party occupies the house but has let the property fall into disrepair can be particularly challenging. Cases where a party refuses to cooperate with showings can force the parties to return to court. Ultimately most parties will cooperate with the process because it is in everyone’s interest to maximize the sale price and the proceeds of the sale.
A party resisting this kind of motion will have to demonstrate that there are circumstances of malice, oppression, or vexatious intent behind the moving party’s request. This can include proving that being forced to move would result in severe financial hardship, or push someone out of a home that is modified to accommodate a disability. It is a high bar: merely showing that a party would be put to some expense or have to move children from a familiar home is unlikely to be sufficient. If the sale of the home may prejudice a party’s right to an overall property settlement the court may still allow the sale while making some special provision for the proceeds, such as keeping a certain amount of the proceeds of sale in the trust account of the real estate lawyer until further order or a final agreement between the parties.
The law in Ontario permits a co-owner to obtain an order forcing the sale in most circumstances. That can be a strong negotiating factor for the party seeking the sale. It’s typical for the issue to be resolved as one item in a comprehensive Separation Agreement or court order, but where that is not possible, the court process permits the parties to obtain relief that they cannot obtain on consent.