Co-Owner Not Paying the Mortgage or Taxes in Ontario: Your Options

You bought a home with someone else, and now you are making the whole mortgage payment and paying the property tax while the other owner contributes nothing. You may be wondering whether you can recover that money, whether you can make them leave the arrangement, and what happens if you simply stop paying too.

This article explains in general terms how Ontario co-ownership works, what a written agreement can cover, and how the Court of Appeal has dealt with reimbursement and forced sales. Every situation is different, so treat it as a map of the issues rather than a prediction.

Why one owner's missed payments become everyone's problem

Co-owners can hold title in different ways. Joint tenants' shares pass to the surviving owners, while a tenant in common's share does not pass automatically to the other owners on death and instead becomes part of their estate. Co-owners may also hold equal or unequal shares, and decision-making can follow the size of each share.

Holding title together does not by itself say who must pay what each month. That is usually set by an agreement between the owners, by what the mortgage lender requires, and, if there is a dispute, by what a court finds fair. If you stop paying to make a point, you may put the property and your own credit at risk, so check your mortgage terms and speak to a lawyer first.

Start with the co-ownership agreement

If you signed a co-ownership agreement, read it before anything else. Ontario's guide says a good agreement should cover several topics that matter here.

• Funding of the mortgage, property taxes and repairs, and each owner's contributions.
• Compensation for breach or misuse of funds.
• Mediation or arbitration for disputes.
• How owners enter and exit, including how fair market value is set and whether the other owners, a third party or a sale will take a departing share.

If your agreement has these terms, they may give you a faster and cheaper route than court. If you have no agreement, or it is silent on missed payments, the court cases below become more important.

Getting your money back: reimbursement and unequal shares

In one Court of Appeal case, the court ordered a property sold and the net proceeds divided equally. It also awarded occupation rent because the other owner had sole use of the lot, and said the co-owner who paid the mortgage and property tax may be entitled to reimbursement for payments she made.

In another case, the owners held title as tenants in common and one paid the carrying costs, meaning taxes, mortgage, insurance and repairs. The court imposed a constructive trust giving him 65% of the property's value and ordered a sale, reasoning that contributions far above what a tenant would pay in rent justified more than an equal split.

These decisions show that courts can look at who actually paid. They are not a formula. Whether you are entitled to reimbursement, occupation rent or a larger share depends on the facts, such as any agreement, who lived in the home and how the payments were made, and a lawyer can assess that for you.

Forcing a sale under the Partition Act

Joint tenants and tenants in common may be compelled to make or suffer partition or sale of the land under the Partition Act. A person interested in land may bring an action or application for partition or for sale if the court considers sale more advantageous to the parties interested.

The Court of Appeal has said a co-owner has a prima facie right to force a sale, and the party resisting sale must show the property should not be sold. A court may refuse only if the owner seeking sale is acting in a malicious, vexatious or oppressive fashion. The court's discretion to refuse is described as narrow.

A sale is a serious step because it ends the co-ownership. How the proceeds are divided and what is paid out of them depends on the facts and the documents, so it is worth confirming with a lawyer. Whether you can sell or mortgage only your own share without the others is a separate question that also depends on the facts, so ask a lawyer rather than assuming.

What to do next

• Find your co-ownership agreement, the transfer, and your mortgage documents.
• Keep a record of every mortgage, tax, insurance and repair payment, with dates and bank proof.
• Keep records of who lives in the home and who has paid nothing.
• Put your request for repayment in writing, calmly and with the figures.
• Check whether your agreement requires mediation or arbitration first.
• Speak with a real estate lawyer before you stop paying, sign anything, or start a Partition Act case.

Frequently asked questions