Co-Owners Who Disagree: Forcing the Sale of Jointly Owned Property in BC

Co-owning a house or rental property works well until the owners want different things. One sibling wants to sell the inherited family home; another wants to keep living in it. A friend who bought a condo with you needs their money back.

If talking does not resolve it, BC law gives co-owners a way out. The Partition of Property Act lets the Supreme Court order the property divided or, far more often, sold, with the proceeds shared.

Who can ask the court to force a sale

Section 2 of the Partition of Property Act says that joint tenants, tenants in common, mortgagees or other creditors with liens on the land, and all parties interested in land may be compelled to partition or sell it. It applies whether the interest is legal or equitable. In practice, that covers most people who share ownership of BC real estate, whether they bought together, inherited together or invested together.

The application is made to the Supreme Court of British Columbia. Under section 3, it is enough to ask for a sale and distribution of the proceeds; you do not have to ask for the land to be physically divided first. Rule 2-1 of the Supreme Court Civil Rules lists a claim for an order of partition or sale among the proceedings started by petition, rather than by a notice of civil claim.

This article is about co-owners who are not spouses. If the co-owner is a spouse or former spouse, the Family Law Act usually governs the home instead. Our article on court-ordered sale after a separation covers that situation.

Partition or sale?

Partition means physically dividing the land between the owners. For a single house, a strata unit or a typical city lot, that is rarely practical, and section 17 treats an order splitting land into parcels as a subdivision that must comply with the Land Title Act. As a result, most applications ask for a sale.

The half-or-more rule

Section 6 is the provision co-owners most need to understand. If the owners asking for a sale hold, individually or together, half or more of the interest in the property, the court must order a sale unless it sees good reason to the contrary.

That places the burden on the owner resisting the sale to show a good reason. Wanting to keep the property, or preferring to wait for a better market, will not necessarily be enough. Whether a particular reason is good enough depends on the facts and on how the courts have applied the section, so get advice on your circumstances before relying on an argument either way.

If you own less than half

An owner with less than half the interest can still apply. Section 7 lets the court order a sale at the request of any interested party, despite the objection of others, if a sale would be more beneficial for the owners than a division. The court may consider the nature of the property, the number of owners, and the absence or disability of any of them.

Under section 8, the court may order a sale at the request of any owner, but it may not do so if the other owners, or some of them, undertake to buy the share of the owner asking for the sale. If they give that undertaking, the court may order a valuation of the share and give directions.

Buyouts, bids and how the proceeds are shared

A court-ordered sale does not have to mean losing the property to a stranger:

• Buyout undertaking. As noted above, the other owners can offer to buy the applying owner's share at a value set in the way the court directs.
• Owners can bid. Section 10 allows the court to let interested parties bid at the sale, on terms it considers reasonable, such as setting off their share against the price.
• Court control of the money. Sections 11 to 13 allow the court to direct how sale money is held and applied, including paying off charges against the property.
• Costs. Section 16 gives the court discretion over the costs of the proceeding.

The sale price is only part of the picture. Co-owners often disagree about who paid the mortgage, taxes, insurance and repairs, and whether someone who lived in the property should account for that. These adjustments can matter as much as the sale order itself.

Before you go to court

A court application is a serious step. Before starting one, it usually makes sense to:

• Check the title. Confirm how the property is held and what is registered against it, including mortgages and any liens.
• Look for an agreement. A co-ownership agreement may set out a buyout formula, a notice process or a dispute resolution clause that applies first.
• Get a value. An independent appraisal gives everyone a common starting point for a buyout offer.
• Gather the numbers. Collect records of who paid what since the purchase or inheritance.
• Make a clear written proposal. A reasonable offer, made in writing, can resolve the matter without a hearing.

If the property came from an estate, the executor's role and the timing of any transfer to the beneficiaries also need attention. Our article on selling a house in an estate explains the executor's process. For an overview of how Supreme Court proceedings move, see how a civil lawsuit works in BC Supreme Court.

Stuck with a co-owner who will not sell? Know your options first

Our litigation lawyers can review the title and any co-ownership agreement, explain your options under the Partition of Property Act, and negotiate a buyout or bring an application to court.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.