Can a Spouse Force the Sale of the Family Home in BC?

When a relationship ends, one person may want to sell the house while the other wants to stay. You may wonder whether one owner can make the other go along with a sale.

In British Columbia the answer depends on whether you are co-owners, spouses, or both. The courts have tools under several statutes, and none works automatically.

This article covers the law of British Columbia.

Co-owners and the Partition of Property Act

How you hold title shapes your starting position. Where land is transferred to two or more people, they are tenants in common unless the transfer document shows a contrary intention. If the shares are not stated, they are presumed to be equal. A transfer to spouses is not treated differently just because they are married, because spouses are treated as two persons when acquiring land.

Joint tenants and tenants in common may be compelled to partition or sell the land. If interested parties holding at least half the property request a sale, the court must order a sale unless it sees good reason to the contrary.

The court may also order a sale instead of partition despite the dissent of another owner.

Sale under the Family Law Act

For property division, a person is a spouse if they are married, or if they have lived with another person in a marriage-like relationship for a continuous period of at least 2 years.

To give effect to a division of property, the Supreme Court may require partition or sale of property with payment out of the proceeds, or require a sale to pay an item of family debt. Interim distribution of family property may be ordered.

How a sale fits into your situation depends on the facts, so it is worth confirming with a lawyer. Each spouse has a right to an undivided half interest in family property on separation. Not being on title does not by itself remove this entitlement.

Not everything is shared the same way. Excluded property includes property acquired before the relationship began, inheritances to a spouse, and gifts to a spouse from a third party, and a spouse claiming property is excluded must demonstrate it. The increase in value of excluded property since the later of the relationship start or the acquisition date is family property. A court must not divide excluded property unless it would be significantly unfair not to divide it. The Supreme Court may also order an unequal division of family property or debt if an equal division would be significantly unfair.

Exclusive occupation and protecting the home

• Exclusive occupation: the Supreme Court may grant a spouse exclusive occupation of a family residence for a specified period, including to the exclusion of the other spouse. It is temporary and does not itself transfer ownership.
• Restraining order: on application the court must restrain the other spouse from disposing of property until that spouse establishes that a claim will not be defeated, and it may be made before notice is served.

These orders can affect timing. A spouse who has been given occupation for a period is not the same as a spouse who owns the home outright, so the sale question remains open.

Spouses can also settle things themselves. They may make a written agreement to divide property equally or unequally, and each spouse's signature must be witnessed by at least one other person. The court may not divide property covered by an agreement unless the agreement is set aside, which may happen if, for example, a spouse failed to disclose significant property or debts.

Co-owners who are not paying their share

A co-owner who has paid more than their share may apply to the Supreme Court for relief, and the court may order the defaulting owner's interest sold under the Supreme Court Civil Rules governing court sales. One co-owner may also bring an action of account against another.

Whether this route suits your situation depends on the facts, such as what each owner has paid and how title is held, so it is worth confirming with a lawyer.

What to do next

Start by understanding how title is held and what each person has paid. Under the Family Law Act, a proceeding to divide property must be started no later than 2 years after a divorce judgment or nullity order for married spouses, or after the date of separation for unmarried spouses. That limit is suspended while the spouses are engaged in family dispute resolution with a professional. Whether any time limit applies to other kinds of claims depends on your situation, so it is worth confirming with a lawyer.

• Get a title search to see whether you hold as joint tenants or tenants in common.
• Collect records of mortgage, tax and maintenance payments each owner has made.
• Check the 2-year deadline for starting a property division proceeding.
• Avoid selling, mortgaging or moving out before getting legal advice.
• Consider a written agreement on sale terms, which must be signed and witnessed.

If one spouse ends up taking over the home, tax can matter. A transfer to a spouse or former spouse under a written separation agreement or a Family Law Act court order is claimed with Property Transfer Tax exemption code 15. For federal tax, you generally do not have a capital gain or loss if you give capital property to your spouse or common-law partner, and the recipient takes the transferor's cost. How this applies depends on your situation, so it is worth confirming with a lawyer or accountant.

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