Inheriting a Home With Siblings in Ontario: Buyouts and Sale

A parent's house is often the biggest asset in an estate, and it is often left to several children together. One sibling may want to keep it, another may need the money, and a third may live far away and want nothing to do with it.

This article explains the usual options, why an independent appraisal helps, and what the law says when beneficiaries cannot agree.

Who decides what happens to the house

Estate trustees carry out the wishes set out in the will. Their duties include winding up the deceased's affairs and paying taxes, bills and other debts, and the estate is then distributed according to the will. The estate trustee is not simply one of the siblings choosing for the others. Their role is to carry out the will, so how they handle the house depends on what the will says, and a lawyer can confirm what applies to your situation.

The wording of the will matters a great deal. Some wills say the house must be sold, some give it to named people in shares, and some give the trustee discretion. A lawyer can read the will with you.

Timing: the executor's year

The Court of Appeal for Ontario confirms that estates are still presumed to be wrapped up within one year of death, often called the executor's year. When an estate is not simple, the court accepts that expecting administration to finish within that year may be unreasonable. A disputed house can make an estate less simple, so patience, and clear written updates from the trustee, usually help.

The usual options for a shared house

• One sibling buys out the others. The buying sibling pays the others for their shares, often with a mortgage or other financing.
• The house is sold on the open market and the proceeds are divided under the will.
• The siblings keep the house together under a written agreement covering costs, use and how someone can exit later.
• One sibling takes the house as part of their share and the others receive other estate assets of equal value.

An independent appraisal is the starting point for any buyout. It gives everyone a shared figure instead of arguing over guesses. If siblings still disagree, they can each get a valuation or agree on a single appraiser together. Also discuss costs such as realtor fees, legal fees, repairs and carrying costs, since these affect what each person actually receives.

Whatever you agree, put it in writing and have each sibling get independent legal advice. A verbal deal over a kitchen table can fall apart later.

When siblings cannot agree: partition and sale

Under section 2 of the Partition Act, a joint tenant or tenant in common may be compelled to make partition or sale. The co-owner resisting a sale bears the onus, and a sale is refused only for malicious, vexatious or oppressive conduct. That is a high bar, so a sibling who simply does not want to sell often cannot stop a sale.

There is a timing exception. Where the land passed by will or on intestacy, no partition proceeding may be taken until one year after the death. How title is held, and whether the estate trustee still holds the house, affects which steps are available, so confirm this with a lawyer before starting any court application.

Court proceedings cost time and money and often damage family relationships. Many families find mediation or a negotiated buyout cheaper.

What to do next

• Get a copy of the will and read what it says about the house.
• Ask the estate trustee for a written timeline and for updates.
• Agree on an independent appraisal and share the report with everyone.
• Ask an accountant about tax. A deceased person is considered to have sold all their property just before death, and any gain is reported on the final return, not by the beneficiary.
• Make sure the estate trustee does not distribute before a CRA clearance certificate, because distributing earlier can leave them personally liable for unpaid amounts up to the value distributed.
• Speak with a lawyer before signing a buyout or starting a partition application.

Frequently asked questions