Forcing a Sale of Jointly Owned Property in Ontario When a Co-Owner Refuses

You own a property with someone else, and you want out. The other owner will not sell, will not buy you out, or will not answer. Being stuck is common with inherited homes, former couples and business partners.

Ontario has a statute for this situation, the Partition Act. This article explains what it allows, when you have to wait, what else you might try first, and what to gather before speaking with a lawyer.

What the Partition Act allows

Under sections 2 and 3 of the Partition Act, joint tenants, tenants in common and others with an interest in Ontario land may be compelled to make or suffer partition or sale. Any person interested in the land may apply to court for partition or sale.

In plain words, partition means dividing the land so each owner takes a part. Sale means the property is sold and the proceeds are shared. A court application is a formal step, so what the court actually orders in your case depends on the facts and is worth discussing with a lawyer.

The right to apply is not limited to one kind of ownership. It covers joint tenants and tenants in common alike. That means a co-owner generally cannot block an exit just by refusing to cooperate.

When you have to wait: inherited property

There is an important exception. Where land passed by will or intestacy to joint tenants or tenants in common, no partition proceeding can be taken until one year after the death.

If you and your siblings inherited a house together and one of you wants to sell, this one-year period matters. Use it to talk, get a valuation and look at buyout options rather than assuming court is the only path.

Options to consider before going to court

• A buyout, where one owner pays the other for their share.
• A negotiated sale of the whole property to a third party.
• A written agreement setting out who pays carrying costs while you decide.
• Mediation or a lawyer's letter to start a serious conversation.

If the co-owners are spouses, other rules apply. Both spouses have an equal right to possession of a matrimonial home, whoever is on title. No spouse may sell or mortgage an interest in a matrimonial home unless the other spouse joins in or consents, has released their rights in a separation agreement, or a court order authorizes it. A transaction that breaks this rule may be set aside. Separating couples should get advice on the family law side before relying on the Partition Act.

Tax and title points to check

Land transfer tax is normally calculated on the value of the consideration, which includes liabilities the buyer assumes, such as a mortgage. So a buyout in which one owner pays the other, or takes over the mortgage, can have land transfer tax consequences.

There is a relevant exception. No land transfer tax is payable where co-tenants divide land so that each receives land equal in value to their original interest. Converting a tenancy in common to a joint tenancy, or the reverse, between the same parties is also not a conveyance, so no land transfer tax applies.

On the income tax side, if you sell or are considered to have sold a home that was your principal residence, you must report the sale and designate the property on Schedule 3 to claim the principal residence exemption. Whether that applies to your share depends on how the property was used, so confirm with an accountant.

Joint tenancy also affects what happens on death. After a joint tenant dies, the survivor updates title with a Survivorship Application. If a spouse dies owning a matrimonial home as a joint tenant with someone other than their spouse, the joint tenancy is deemed severed immediately before death.

What to do next

• Get a current parcel register for the property. Anyone can search and download property records through OnLand for a fee.
• Confirm exactly how title is held: joint tenants or tenants in common.
• If the property was inherited, note the date of death and count one year from it.
• List the mortgage balance, taxes, insurance and repairs each owner has paid.
• Get a recent valuation so any buyout offer has a number behind it.
• Speak with a real estate lawyer before starting a court application.

Frequently asked questions