Forcing a Sale Between Co-Owners in Ontario: What to Know

Owning a home or investment property with someone else works well until you disagree. One of you wants to sell, the other refuses, and you cannot simply sell your half of a house to a stranger on your own terms.

This article explains the starting points: how co-ownership is set up in Ontario, what to gather before you act, and the options to consider before and alongside any court application. How this applies depends on your situation, so it is worth confirming with a lawyer.

Start with how title is held

Your rights depend first on how you and the other owner hold the property. In Ontario, land conveyed to two or more persons (other than executors or trustees) is held by tenants in common unless the document shows an intention to hold as joint tenants. That default applies even where one co-owner is the spouse of another.

Check your transfer documents and the title record to see which applies. If you are unsure, a lawyer can read the documents and explain what they say.

Why the type of ownership matters

When a tenant in common dies, their share becomes part of their estate. When a joint tenant dies, the surviving co-owners inherit the deceased's share. If the co-owner you are in conflict with has died, who ends up with their share depends on whether they held as a tenant in common or a joint tenant.

It also affects how you plan ahead. If you are in a long dispute, review your own will so that your share goes where you intend.

If the property is rented out, tax reporting is also part of the picture. Each co-owner enters only their own share of the capital cost allowance. Rental income is reported for the calendar year, January 1 to December 31. How income and expenses are divided between you depends on your situation, so it is worth confirming with an accountant.

Try to resolve it before going to court

Court is usually a last step. It takes time and money, and the outcome is decided by a judge rather than by the two of you. Many co-owners are better served by working out a deal first.

• Offer to buy the other owner out, or ask whether they want to buy you out.
• Agree on a listing price, a real estate agent and a timeline in writing.
• Suggest mediation with a neutral person.
• Review any co-ownership agreement you signed, which may set out how a sale or buyout should work.
• Send a clear written request so there is a record of what you asked and when.

If a buyout involves a buyer who is not a Canadian citizen or permanent resident, extra tax may apply. Ontario's Non-Resident Speculation Tax is 25% on residential property in Ontario (land with one to six single-family residences) bought by a foreign national, which includes a U.S. citizen without Canadian status. An exemption may be available where the buyer is a nominee, a protected person, or the spouse of a Canadian citizen or permanent resident, and a rebate may be available if the buyer becomes a permanent resident within four years of registration. Whether this affects a particular buyout is worth confirming with a lawyer or accountant.

If the dispute goes to court

If talks fail, how to proceed depends on your situation, so it is worth confirming with a lawyer before you take any formal step. Whether a court would order a sale, and the tests, forms, timelines and costs involved, depend on your facts.

What you can usefully do now is pull together the story you can prove: how you came to own the property, what each of you paid, and how the property has been used. Expect the other side to explain why they do not want to sell. Their reasons, and your own, will be part of the picture, so be ready to address them honestly.

What to do next

• Collect the transfer or deed, the title search, and any co-ownership or cohabitation agreement.
• Gather mortgage statements, property tax bills and proof of who paid what.
• Keep a log of repairs, improvements and rent received, if any.
• Save emails and messages in which you ask to sell or discuss a buyout.
• Obtain a recent appraisal or market opinion so you know a realistic value.
• Speak with a lawyer about your options before you file anything or stop paying your share.

Keep a clear record of who is paying the mortgage, property taxes and insurance, and ask a lawyer how the dispute could affect those payments in your situation.

Frequently asked questions