What Happens To Your Family Home After Separation?

After separation there are many ways to handle the family home, or other family property. The parties will need to decide if they want to keep the home, or sell. If the parties want to keep the home, then one party can buy the other party out, or agree to do so at a later date. If the parties are not going to be able to afford the home, given that the parties will likely need two separate homes, then the parties can choose to sell.

What Happens If the Parties are Unable to Agree on a Realtor?

The parties can jointly select a realtor, or one party can select three while the other party chooses one from the three, or the parties can hire their own separate realtor of their choice to co-list a property.

What Happens If the Parties are Unable to Agree on Whether to Sell?

If the parties are unable to agree on whether to sell at all, the parties may want to consider mediating the issue. At mediation, the parties may be able to brainstorm different ideas on how to make things work for both parties, and come up with a plan that could work for both parties. If the parties are unable to come to an agreement through the assistance of their lawyers in negotiations or mediations, the parties may apply to the British Columbia Supreme Court, and let a judge decide.

Necessary and Expedient

Under Rule 15-8(1), of the Supreme Court Family Rules, the court may order the sale of a property if it appears necessary or expedient that the property be sold.

Court may order sale

(1)    If in a family law case it appears necessary or expedient that property be sold, the court may order the sale and may order a person in possession of the property or in receipt of the rents, profits or income from it to join in the sale and transfer of the property and deliver up the possession or receipt to the purchaser or person designated by the court.

Conduct of sale

(2)    If an order is made directing property to be sold, the court may permit any person having the conduct of the sale to sell the property in the manner the person considers appropriate or as the court directs.

Directions for sale

(3)    The court may give directions for the purpose of effecting a sale, including directions

a.      appointing the person who is to have conduct of the sale,

b.      fixing the manner of sale, whether by contract conditional on the approval of the court, private negotiation, public auction, sheriff's sale, tender or some other manner,

c.      fixing a reserve or minimum price,

d.      defining the rights of a person to bid, make offers or meet bids,

e.      requiring payment of the purchase price into court or to trustees or to other persons,

f.        settling the particulars or conditions of sale,

g.       obtaining evidence of the value of the property,

h.      fixing the remuneration to be paid to the person having conduct of the sale and any commission, costs or expenses resulting from the sale,

i.        that any conveyance or other document necessary to complete the sale be executed on behalf of any person by a person designated by the court, and

j.        authorizing a person to enter on any land or building.

Application for directions

(4)    A person having conduct of a sale may apply to the court for further directions.

Certificate of sale

(5)    The result of a sale by order of the court must be certified in Form F70 by the person having conduct of the sale and that certificate must be filed promptly after completion of the sale.

Vesting order

(6)    The person having conduct of the sale may apply to the court for a vesting order in favour of a purchaser.

This law was set out in the case of Dosanjh v. Lali, 2021 BCCA 204, where the court stated that: Rule 15-8 thus engages the exercise of judicial discretion. Whether it is “necessary or expedient” for property to be sold will depend on the circumstances of each case. This case involved a non-arm’s length sale of a property to the parents of one of the parties. The Court stated:

[34] There is a surprising dearth of authority in the family law context on the factors the court should consider when deciding an application to approve a proposed sale where the initial order for sale requires court approval. In my view, as in other contexts involving a court-ordered sale, if a spouse has been granted sole conduct of the sale of property that spouse “must go about finding a buyer in a business like manner and the court must be satisfied that the proposed sale is provident in all the circumstances”: Mission Creek Mortgage at para. 40. The relevant circumstances on an approval application will include the terms of the in itial order for sale and the manner in which the sale process was conducted, which may well inform the court’s assessment of whether a particular proposed sale is provident. In other words, where an order for sale made under Rule 15-8 includes a term that any sale is subject to court approval, the “necessary or expedient” criterion applies to both the initial order for sale and any subsequent order approving a proposed sale.

[35] When deciding whether to approve a proposed sale of property, in the absence of exceptional circumstances, the court should ensure that the property has been exposed to the market. As Justice Southin stated in Fright v. Fright (1996), 1996 CanLII 10205 (BCCA), 21 BCLR (3d) 366 (CA), “[o]nly then can there be any confidence that a proposed sale is prudent”: at para. 13. Nevertheless, in some cases, market exposure may not be necessary for a proposed sale to be demonstrably provident. For example, in Olson v. Miller, 2019 BCCA 274, in a non-family law context where foreclosure was imminent and the value of the subject property was not in dispute, this Court accepted that exposure to the market would have served no purpose and that it was thus unnecessary. As Justice Frankel explained, circumstances such as those at issue in Olson were exceptional in the sense contemplated in Fright: at para. 77.

In the family law context, when the court decides whether to order the sale of family property, relevant factors of consideration under Rule 15-8 include, among others, the needs of children, the availability of alternative accommodation, and external economic factors. Where necessity is not in issue, to be “expedient” a court-ordered sale of property must be advantageous to both parties.

How Do You Apply For Sale of the Family Home?

In the case of AB v CD, 2015 BCSC 2134, an overview of the law was provided relating to an application for sale of the family home on an interim application.

The Courts have discretion to order the interim sale of a family home where it is necessary and expedient. The courts have considered a number of factors in doing so. These include:

·         Whether the sale is necessary: this is an important factor. If the sale is not necessary, any sale should be advantageous to both parties. Another factor is whether the sale will promote early settlement and whether the sale will defeat a spouse’s claim for reapportionment. If a party to the family law proceeding is making an excluded property claim, the court will consider that before making an order for the sale of the property, in which the claim is being made.

·         Whether the sale of the home is inevitable, or whether a spouse might be able to retain it on a division of assets. This means that if the parties are not going to be able to afford to keep the home, it’s likely that the Court will order the sale of the property. However, if there is enough money in the overall pool, then the Court might not order the sale of the property.

·         Whether the sale would effectively eliminate accommodation for a spouse and children or whether alternative accommodation is available.

There are many ways to handle the family home after separation. If you have questions, reach out to one of our experienced Vancouver family lawyers for a consultation.