Bob Aaron email@example.com
Judge ruled there was no oppressive conduct on parents’ part that would justify the daughter’s position that she did not want to sell the house.
It’s not uncommon for relatives to add their names onto the title of a house to help the real owner — typically a child or parent — qualify for a mortgage or avoid probate fees when the owner dies.
Sometimes, however, the plan backfires and the parties can wind up in a major disagreement or even litigation. That’s what happened in a court case earlier this year.
Khurshid and Bushra Katal were 99 per cent owners of a townhouse on Weston Rd. They lived there with their daughter Noshaba Khurshid and her children. Khurshid had the remaining one per cent interest in the house.
The parents wanted to sell the house to move to more affordable accommodations. They took their daughter to court in an application under the Partition Act for an order directing that the property be sold.
The daughter, who opposed her parents’ application, is a single mother whom, by going on title as a co-owner, helped her parents qualify for a mortgage.
It appeared that while the parents paid the monthly mortgage payments, condominium fees and property taxes, the daughter paid most of the utility charges and upkeep expenses for the home.
The application came before Justice Edward Morgan in June. Each of the parties told the judge that they would suffer some personal hardship if the other side got their way.
The daughter was particularly concerned that her son was starting university, and she did not want to move at a time when he should be getting settled into his new studies.
For their part, the parents were concerned that carrying the mortgage was too much of a financial burden for them to continue to bear. As well, the Katals both have heart conditions and were anxious to move to a residence with fewer stairs to climb than their three-storey townhouse.
Under the Partition Act, the court can order a sale of the property and division of the proceeds — unless there is sufficient reason for not doing so.
The onus is on the party opposing the sale to demonstrate that the application is the result of “malicious, vexatious or oppressive conduct.”
The judge can order the sale of the property without the consent of an owner if that owner is withholding consent unreasonably.
In reaching his decision to order the sale of the property, Justice Morgan wrote: “I see no oppressive conduct here on the (parents’) part that would justify the position taken by the (daughter).
“They have good reason to want to sell the property and are the 99 per cent owners of it. They can reasonably expect to be able to sell it at this stage of their lives.
“While I sympathize with the (daughter) in that she will have to move to a new home with her family, she will get the value out of the 1 per cent interest once the property is sold,” the judge said in his decision.
The lesson from this decision is that where a party is going to be registered on title just for mortgage purposes, the arrangement should be carefully documented in advance to provide for an exit strategy.
In addition, the majority owner should consider getting a limited power of attorney to allow the property to be sold at some point in the future without the consent of the minority owner.