Property purchase is typically the largest purchase most people make in their lifetime. As such, care should be taken to ensure that any co-owners of such property are carefully selected and that the parties’ goals, with respect to ownership of said property, align. If two or more joint owners of a real property disagree as to the use to be made of such property, British Columbia’s Partition of Property Act may be referenced to provide direction as to how the property should be disposed of.
A Mother and Son Jointly Purchase a Property
The case of Punjani v Dhanani involved a mother and son who had purchased real property together. The petitioner in this application is the son, and the respondent is the mother. The parties purchased real property in Surrey, BC, in December 2015. They are each registered on the property title as joint tenants and co-mortgagors of the property with their bank.
The petitioner alleged that he paid the entire down payment of the property ($132,000) and the property purchase tax and closing adjustment amounts in respect of the sale himself. He further claimed that the only reason the respondent was listed as a joint tenant was to reduce the tax burden for estate planning purposes, as the intention was that they would reside in the home together, which would allow each of them to claim the property as their principal residence on their tax forms.
For her part, the respondent claimed that the property was hers alone “and that the petitioner has no equitable interest in the Property notwithstanding his position on the title.” The court cited “practical difficulty” regarding this assertion, given that the petitioner was on title to the property and had paid all mortgage payments, insurance, property taxes, utilities and repairs throughout the duration of the parties’ ownership. The respondent explained this discrepancy “by alleging that the respondent agreed to pay these expenses because she and her husband were senior citizens and [her husband] was in poor health.”
The Son Moves to Sell the Property
The petitioner alleged that he could no longer afford to pay the expenses associated with the property, including a $40,000 expense, which was necessary to replace the property’s roof to maintain its insurability. Given his financial constraints, the respondent sought to sell the property. The respondent, who resides on the property with her friends and their son, resisted the sale as she wished to remain there. As the parties could not agree concerning what should be done with the property, the petitioner commenced a claim in the BC court in which he sought an order, in accordance with BC’s Partition of Property Act, that the property be sold.
The Legal Framework Applicable to Disputed Property Sales
Where two or more parties seek the court’s assistance to resolve a dispute regarding whether a jointly owned real property can be sold, the courts will consider the applicable provisions of the Partition of Property Act in assessing what order should be made. To that end, section 2 of the Act dictates that any joint owner of a real property, in any capacity, “may be compelled to partition or sell the land, or a part of it”. Moreover, section 6 of the Act provides that a joint owner of at least 50% of the value of a property has a prima facie right to demand the sale of a property unless the party resistant to the sale can provide “good reason” as to why the property should not be sold.
The party that resists the sale bears the onus of demonstrating to the court that the order for partition or sale should not be made. However, the court noted that if sufficient evidence to support barring the sale/partition is not provided, “the court must enforce the interested party’s prima facie right to partition or sale.”
Application of the Legal Framework to the Facts of This Case
The court noted at the outset that “the question whether to refuse to issue an order for sale under the Act is a discretionary one.” It then continued to find that the respondent had provided no evidence of any “binding or enforceable agreement between the parties” with respect to how long they would jointly hold the property.
Moreover, the respondent had failed to allege that her ownership of the property related to “an express or resulting trust under which the petitioner agreed to hold the Property for her. Indeed, the respondent struggled to explain the legal basis for her claim to the Property.” With respect to the potential hardship that either party would suffer if the court were to order the sale, the respondent relied upon “her age and health and, to a more limited extent, her financial situation. However, refusing the application for sale will not save the respondent from hardship. The reality is that neither party has the desire and the resources necessary to maintain the Property. It would not be appropriate to require the petitioner to continue paying the expenses on a home where he does not live. If neither party is willing and able to maintain the Property, then the respondent will almost inevitably have to move. She will face certain financial and emotional challenges irrespective of the outcome of this application.”
Furthermore, the court noted that the petitioner could sustain significant potential financial hardship if the order were not issued, whereas the respondent’s evidence of potential personal financial hardship was “quite limited.” The court also found it difficult to believe that the respondent could “‘reasonably think’ that the petitioner would continue to pay all expenses associated with the property when he is not living at the Property and his legal title is under attack.” Given that the respondent would be entitled to participate in any sale process and would be permitted to purchase the petitioner’s interest in the property if she so chose (and could afford) and that the proceeds of any sale would be held in court, which would allow the respondent time to claim ownership to any or all of the proceeds, the court was satisfied that the order for sale of the property should be granted in this case.
Vancouver Real Estate Litigation Lawyers Advising Clients On Partition of Property Act Disputes
If you are involved in commercial litigation that involves a dispute concerning real estate, including a petition seeking partition or sale of real property. In that case, you need legal counsel to guide you. Fortunately, the commercial litigation lawyers at Meridian Law Group are here to help. From our offices in downtown Vancouver, British Columbia, Meridian Law Group is proud to provide British Columbians from all over the province with competent, capable, helpful assistance for their commercial litigation matters.
Contact Meridian Law Group today, either online or by telephone, at (604) 687-2277, to schedule a confidential consultation. One of our knowledgeable, capable, friendly staff will be pleased to listen to your concerns and help you to plan a strategy for how best to advance and protect your interests.
