Property Division under Power of Sale

Couple Fights - Meaning and Solutions


There are 2 sellers on title, one moved out but continued to pay their half of mortgage. Seller in home missed two mortgage payments, so the Bank has implemented Power of Sale proceedings. The previous Listing has expired. One seller is trying to relist but the second seller wants to wait. What are the seller’s obligations, namely the one who wants to wait until the new year to list? Does she have to sign the listing legally because other seller said so?


No. She is not forced to sign.

Normally, her rights would be determined under the Partition Act, whereby the Court will ensure that the interests in the property are properly divided.

However, in this case, what a fantastic opportunity for the Seller who wants to wait!

All they really need to do is let the Power of Sale continue and acquire the other party’s half interest in the property. Right now, that will be available at a substantial discount. They will then own the entire property without involvement of their former co-owner. It is possible that they may have to pay off the entire mortgage in order to do so, and that might mean bringing someone else into the picture.

It’s better than the Partition Act split which will be on a 50/50 basis, assuming no written agreement between them to the contrary.

It’s a tricky situation to manoeuvre, so a lawyer’s assistance is required immediately. There are also some “good faith” obligations to be observed. Good faith also includes “omissions”, namely something that you should have said, but didn’t. So be careful.

The extension of the good faith doctrine was made by the Supreme Court of Canada on 18 December 2020 in Callow v.Zollinger.

If the two parties are “married”, then, my suggestion will not have them “married” for much longer.

Brian Madigan LL.B., Broker

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