What happens when two people who own property together (joint tenants or tenants in common) can’t agree on what should happen to their land. When co-owners agree to list the house for sale and to divide the profits, or alternately implement a buy out of one owner’s share, the process can be fairly easy and concluded without litigation. But in some instances, one person does not want to sell the house and may not have the money to buy-out the second person. In addition, even if the parties agree on a sale, they may not be able to agree on the details of how the sale should be carried out or they may have disputes over accounting for each owner’s contribution to the acquisition, maintenance or improvement of the property.
British Columbia Partition of Property
Joint ownership of land is extremely common. If one partner cannot afford to buy-out the other and there is no agreement to sell, it may be necessary to apply to the court to have the land sold under the B.C. Partition of Property Act (the “PPA”). In those cases, the PPA provides the court with authority to direct a sale of the property and to distribute the proceeds. The court can also give direction about how the property is to be sold.
British Columbia Supreme Court Partition Case
The case of Haigh v. Kent, 2016 BCSC 333, was recently decided by the British Columbia Supreme Court on February 26, 2016 under the PPA.
Summary of Facts
Leonard Kent and Randy Haigh, who were once brothers-in-law, operated a business on property known as Kent’s Beach Resort from 1980 until 2004 when Mr. Haigh terminated the business relationship. In previous litigation that commenced in 2007, Mr. Justice Saunders found that the Kents had been unjustly enriched by Mr. Haigh’s contributions over 20 years a constructive trust was awarded in favour of Mr. Haigh.
Mr. Haigh commenced an action seeking registration of an undivided 25% ownership interest in the property, and an order that the Property be sold and the proceeds divided pursuant to the PPA.
One of the arguments presented by the Kents was that because Mr. Haigh’s interest was equitable (constructive trust), he does not have standing to seek partition or sale under the PPA. The court found, however, that Mr. Haigh is a person who is entitled to maintain a proceeding for partition, and the defendants are clearly persons who may be compelled to partition or sell the land, or a part of it, as provided in section 2(1) of the PPA. Mr. Haigh’s Petition requested the partition and sale of the property in question.
Based on certain physical aspects of the property, the court determined that a partition would not serve the best interests of either party.
Sale of Property
The court also declined to sell the property as any such sale would inflict serious hardship on the Kents ending seven decades and four generations of their family’s connection to the land, a connection not shared by Mr. Haigh.
Having concluded that division would be inequitable and impracticable and that sale and distribution of proceeds would cause undue hardship to the Kents, the court determined that it was appropriate to exercise discretion under section 8 of the PPA to direct Mr. Haigh to sell his 25% interest in the property to the Kents.
Contact a Vancouver Land Ownership Lawyer
It is almost always in the best interests of land owners to come to an agreement and avoid having to go to court to determine the fate of their joint property. However, a court ordered sale may be the only option when trying to end a shared property ownership. If you cannot amicably resolve a dispute with a co-owner over land , it is important to speak to the experienced lawyers at McLarty Wolf as soon as possible. Contact either Ross McLarty or Murray Wolf for a no obligation 30 minute free consultation. Call the law offices of McLarty Wolf at (604) 688-9542 today or contact us via our online form here.