Jointly Owned Property After Separation

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When married spouses jointly own property, they can agree to sell such property at any time. However, what happens when the spouses separate and disagree about selling a property? This question often arises in family law matters when one party wants to retain or continue living in a property, such as a matrimonial home, and the other wishes to sell it. 

In this instance, two things can happen. First, the party wishing to retain the home can apply to the court for an exclusive possession order, although such a remedy is temporary. If exclusive possession is ordered, this can temporarily prevent the other spouse from being able to obtain an order to sell the home. Second, the party wishing to sell the property can apply to the court for an order to be listed and sold. Often, these two things will happen simultaneously, i.e., one party will bring a motion to sell a home, and the other party will claim exclusive possession or argue that prejudice to one of their family law claims will result from the order for sale.

The Partition Act and the Family Law Act provide courts with authority to order sale of a property

The Partition Act includes a right for a joint owner to seek the sale of a property, providing that: 

  1. All joint tenants, tenants in common, and coparceners, all dowerless, and parties entitled to dower, tenants by the curtesy, mortgagees or other creditors having liens on, and all parties interested in, to or out of, any land in Ontario, may be compelled to make or suffer partition or sale of the land, or any part thereof, whether the estate is legal and equitable or equitable only.
  2. (1) Any person interested in land in Ontario, or the guardian of a minor entitled to the immediate possession of an estate therein, may bring an action or make an application for the partition of such land or for sale thereof under the directions of the court if such sale is considered by the court to be more advantageous to the parties interested.

The Family Law Act also includes authority for the court to order the sale of property, providing that a court may make an “order that the property is partitioned or sold for the purpose of realizing the interests in it….”

Joint tenants have a prima facie right to sell jointly owned property

Generally, the default rule is that a court will order a jointly owned home to be sold when one party requests it. This is considered a basic right of a joint owner. Therefore, the starting presumption is that a court will grant an order to sell a property. 

The party opposing the sale must provide evidence of why the court should not order the sale

Therefore, the party who opposes the sale must bring forward evidence of why the court should refuse the sale. Typically the party opposing the sale must bring forward evidence of malicious, vexatious, or oppressive conduct concerning the partition and sale of the home, which includes hardship amounting to oppression. 

Specifically, in family law cases, a court may decline to order a sale of the jointly owned spousal property if doing so would jeopardize substantial rights under the Family Law Act. In that situation, the request to sell can be deferred until the Family Law Act matters are dealt with. As noted by the court in several cases, the Family Law Act does not displace the Partition Act. Still, in a family law case, a partition application may not be granted if there is evidence that the family law claim would be unfairly prejudiced (for instance, see Parent v Laroche, 2020 ONSC 703 or Dhaliwal v Dhaliwal, 2020 ONSC 3971).

in the case of Dhaliwal v Dhaliwal, the court discussed that in assessing whether prejudice would result from ordering the sale of jointly owned spousal property, the court “must take a realistic view of assessing the impacts of a sale – both positive and negative – in relation to the interests of both joint tenants and the family as a whole.” The court discussed several everyday situations in family law matters: 

  • If the financial circumstances indicate that the property would need to be sold eventually, then there is “little justification” for delaying the sale.
  • If the carrying costs of the home are currently unsustainable, it is not appropriate to “indefinitely perpetuate financial hardship” and the home should be sold.
  • When there are children that live in the property, the court will consider the impact of the sale on them, including the emotional impact, as well as the need to ensure that the children have appropriate housing. Therefore, the court will consider the availability and affordability of alternative housing, as well as support obligations and the resources of the parties. This may also impact the timing of the sale, such as a children’s school year. However, the “mere existence of children in a household is not in itself a sufficient basis to oppose a sale.” 
  • The timing of a trial may be a consideration. If the motion to sell the home is brought on the eve of trial, then this may reduce the need for an immediate sale. 
  • The court may consider potential equalization claims and proposals that one spouse acquire the home in the equalization settlement. 

The court cannot compel one spouse to sell to the other

Notably, the court cannot order one spouse to sell to the other nor order that one spouse has a right of first refusal in the sale process.

A right to exclusive possession may prevent a sale

If the spouse opposing the sale of a matrimonial home has, or claims, a right to exclusive possession, the court must consider and determine that claim before ordering the sale. The Family Law Act sets out factors that a court must consider when a party claims exclusive possession:

  • the best interests of the children affected;
  • any existing orders under Part I (Family Property) and any existing support orders;
  • the financial position of both spouses;
  • any written agreement between the parties;
  • the availability of other suitable and affordable accommodation; and
  • any violence committed by a spouse against the other spouse or the children.

Exclusive possession is only available under the Family Law Act for married spouses. However, unmarried spouses may claim home possession through a trust claim, as a form of support, or by a restraining order. This is further discussed in our previous blog.

Contact the Family Law Lawyers at Johnson Miller Family Lawyers in Windsor for Assistance with Property Claims

The experienced family lawyers at Johnson Miller Family Lawyers frequently advise clients on various issues raised in separation or divorce, including asset division and matrimonial property claims. If you have concerns about equalization or asset division, contact us online or call us at 519-973-1500.

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