In estate litigation, we often need to address the issue of how real property owned by two or more people who aren’t otherwise getting along can be sold. (Family law likely has the same issue.)  

In the recent decision of Gill v. Gill, the court found that a real property was owned by an Estate and two others, each as to a 1/3 interest. The court also ordered the sale of the property. 

The decision sets out a detailed procedure for the listing and selling of the property. The procedure is a useful precedent for court orders or settlement agreements that need to address the issue.  

The mechanism provided in the decision is as follows: 

 For the foregoing reasons, I make the following orders:  

a)        Karnail, Kuldeep, and the Estate are each one-third owners of the Property, as tenants in common;  

b)        Each party shall have 28 days from the date of this order to make an offer to purchase the other’s interest in the Property;  

c)        If an agreement is not reached in 28 days, Karnail shall, within 7 days, provide the name of 3 real estate agents who he agrees may list the Property; 

d)        Within 7 days of receiving that list, Kuldeep shall choose one of those listing agents, who shall be the listing agent for the Property; if she fails to choose, Karnail shall have sole authority to pick the listing agent;  

e)        All parties shall cooperate fully in signing the listing agreement; they shall follow the advice of the listing agent as to listing price as well as any repairs or refresh that are required; the costs of any repairs or refresh shall be born by Karnail, Kuldeep and the Estate equally;  

f)         The Property shall be listed within 14 days of the listing agreement being signed, or as agreed by both parties if the listing agent so advises;  

g)        The parties will cooperate fully in considering all offers and making counteroffers; in the event they disagree, they shall follow the recommendations of the listing agent; 

h)        If either party is not cooperative and does not consider reasonable offers and counterproposals in a timely manner, or if a party does not follow the recommendations of the listing agent in making the Property ready for sale and available for showings, or if a party is disruptive or impedes the sale of the Property in any way, the other party may bring a motion on an urgent basis, seeking to have sole authority to list, sell, and close the Property without the other’s consent or signature;   

i)         Prior to the closing of the Property, Kuldeep shall provide evidence of all mortgage payments, property tax, and insurance payments made on the Property since January 2018, as well as evidence of all rent payments received since January 2018; Karnail shall be responsible for one-third of all the payments made by Kuldeep, less one-third of the rental income received by Kuldeep (“Ownership Adjustment”);  

j)         Upon closing of the sale of the Property, after payment of any registered encumbrances, the usual real estate adjustments, and real estate legal fees, the proceeds shall be divided as follows: 

1. one-third to Karnail, less the Ownership Adjustment; 
2. one-third to Kuldeep, plus one-half the Ownership Adjustment; 
3. one-third to the Estate, plus one-half of the Ownership Adjustment;  

k)        if the parties cannot agree on the Ownership Adjustment, they may contact my judicial assistant at {redacted) to arrange a Zoom conference at 9:00 a.m. in order to deal with the issue; 

Paragraph g raises may be problematic. Does the listing agent have the power to dictate whether a specific offer must be accepted? Maybe so. However, this clause appears to only be triggered if the parties cannot agree. If an offer is unanimously accepted or rejected, the listing agent’s authority to recommend acceptance or rejection is not triggered. 

The court Order in Gill allowed the parties to return to the court to deal with any issue that might arise during the sale process. This may not be readily available in the context of a settlement agreement. In many cases where a matter is settled at mediation, terms are inserted so as to allow the parties to return to the mediator to either mediate or arbitrate any disagreements or issues that may arise in the sale process on an expedited basis. 

Thanks for reading.

Paul Trudelle