Forcing the sale of a co-owned property in British Columbia is a process that lends itself to a relatively fast resolution, however, sophisticated opponents can take a variety of steps to complicate matters and slow the process, making litigation more expensive and frustrating. In some cases, this resistance can be managed through a well-organized claim. This blog deals with a summary of strategies to predict and manage common experiences in petition proceedings.
Co-Ownership
Individuals co-own property for many reasons: an appealing investment opportunity, a joint tenancy entered into with family members or vacation timeshares with friends. Unfortunately, joint ownership does not always lend itself to smooth breakups. While joint owners ideally compromise on selling a piece of property and dividing proceeds, our litigation and dispute resolution team has been retained to apply for the court ordered sale of a property, specifically through the use of the Partition of Property Act, R.S.B.C. 1996, c. 347.[1]
Among the central concerns held by clients wanting to sell a co-owned property, is getting a sale completed quickly. Unfortunately, our court system rarely resolves entire disputes quickly: judges are rightly concerned with doing justice between the parties, ensuring all relevant facts are accounted for before making a decision on a court-ordered sale. An order can have significant consequences, in some cases leaving the parties and their families without a home while the sale process plays out. This requires a methodical and thoughtful approach, sometimes requiring various steps such as document disclosure and cross-examinations.
An opposed and motivated co-owner can take advantage of this requirement and impede the process of a sale. In many instances, the opposed co-owner is living in the property as though they owned the entire property themselves. They have every incentive not to sell, and want to make the sale process as difficult as possible. For example, the opposed co-owner might claim they have spent money on renovations (often paid in cash with handwritten receipts), or that there is an oral (and unwritten) agreement between the parties which prevents any sale from taking place.
These defences do not necessarily mean that a jointly owned property cannot be sold or cannot be sold efficiently. Rather, it emphasizes the case’s organization, especially the important facts about why or how a property was purchased. The goal is to make the case that a court-ordered sale is a relatively straightforward, and that outstanding issues raised by the opposed owner (such as how to distribute the proceeds) can be determined as part of a process that continues after a sale is ordered.
Broad Summary of the Procedure
To broadly summarize the normal course of proceedings in the court-ordered partition and sale of a property, there is a general rule in the Partition of Property Act: if a joint owner has a 50% interest or greater in the property, they have a prima facie right (or an apparent right) to sell the property, absent good reason not to sell the property.
Those “good reasons” come in many forms including where a right of first refusal exists (Nguyen v. Pham, 2023 BCSC 1246) or where the equal owners were to divide the property into a duplex (Holman v. Brooke, 2022 BCSC 526). On the other hand, a “good reason” may not include an excuse that a sale would result in significant hardship (McRae v. Seymour Village Management Inc., 2014 BCSC 714) or having emotional attachments to a property (Sundberg v. Sundberg, 2022 BCSC 2188).
Ultimately, a judge has to make the decision on whether or not to order the sale by doing justice by the parties, based on the specific facts and circumstances of each case.
Forcing a Sale
When an owner seeks a summary, or expedited, process to sell a co-owned property, success is never assured. As discussed above, co-owners may resist for a number of reasons. We regularly see three issues dictate whether or not an expedited process is appropriate:
- how the co-owners’ interest appears on title;
- accounting for unequal investments or payments in relation to the property; and
- whether a “good reason” not to sell a property needs further investigation.
Pursuant to s. 23(2) of the Land Title Act, R.S.B.C. 1996, c. 250 the person named in the title as registered owner is “conclusive evidence” that the registered person is entitled to what is shown. If the co-owner seeking to sell the property has a 50% or greater interest on title, that will normally support a quicker path towards a sale.
In a great deal of cases, parties opposing the court-ordered sale argue that title does not reflect actual ownership. Rather they will ask a judge to perform a deeper investigation to determine whether title should be changed: an agreement (often unwritten) is in place between the parties, or renovations were performed (often evidenced by handwritten invoices, paid in cash) by the opposing owner. These defenses take time to sort out, slowing down the process, and potentially leading to conversion of the partition proceedings to the trial list (see, for example, Ackerman v. Ackerman, 2024 BCSC 1702).
Depending on the strength of the evidence, these arguments can be offset in a number of ways. A dissenting owner cannot simply argue that a sale should be delayed until after an accounting for unequal payments made to support the property (Tseng v Tseng, 2021 BCSC 27). Deciding how to distribute proceeds is different from ordering the sale of the property, and they don’t need to be determined at the same time.
In an ideal case for the co-owner seeking the sale, a judge can agree to sell the property with issues about how the payment is divided to be determined in some other way and at a later time. The sale itself creates momentum that either forces the parties to negotiate or gives them certainty about what is to come next.
All of the above being said, a truly “good reason”, one that is worthy of further investigation, will inevitably hold up the sale of a property. For example, a written agreement between the parties about when and how a property can be sold, or the express intention of the parties to hold the property for a long term where the property can easily be divided in half, may force a judge’s hand to require further investigation. Accounting for these types of objections and finding a clear response can be the difference between a summary partition proceeding and messy, long and expensive litigation.
Getting Experienced Help
Our team is pleased to help co-owners no matter where they stand on a court-ordered sale. We have helped many clients reach a settlement out of court and following litigation. Our litigation and dispute resolution group would be pleased to discuss unique considerations for partition matters, whether they are at the negotiation phase or where settlement seems exhausted and litigation is the most logical step. Contact our lawyers – we would be happy to discuss further with you.
[1] Note: In the event the property is co-owned by former spouses or romantic partners, the Family Law Act, SBC 2011, c. 25 may apply, rather than the Partition of Property Act.
