When the House Outlasts the Handshake

Do You Need a Co-Ownership Agreement in BC? What Happens Without One, and Why Courts Can’t Fix It

With the average home price in British Columbia sitting at roughly $924,000[1] and ownership costs in Vancouver consuming nearly 68% of median household income,[2] it’s no surprise that more people are buying property with friends, family members, or partners. Parents go on title with their children. Friends split a vacation cabin. Siblings inherit a family home. Couples buy with other couples.

These arrangements often begin with goodwill and a firm handshake. Sometimes they begin with a lawyer’s advice to formalize the terms, advice that, in the excitement of closing, gets set aside.

That’s a mistake.

Co-ownership of real property can be a smart financial strategy. But like any structure that depends on alignment between people, it carries risk. And the risk doesn’t come from the market. It comes from what happens when the people involved stop agreeing.

The Agreement you Don’t Make

When two or more people buy property together without a co-ownership agreement, they still have a legal relationship. They just don’t get to define the terms. Instead, those terms default to a statutory framework, most notably the Partition of Property Act,[3] and that framework is designed to end co-ownership, not preserve it.

Under section 6 of the Act, a co-owner holding at least a 50% interest in a property can petition the Supreme Court of British Columbia to order its sale. The court must grant the order unless there is “good reason to the contrary.”

That phrase may sound like it leaves room for discretion. In practice, the courts have interpreted it narrowly. While there is no formal legal onus on the party opposing the sale, in practical terms it falls to those opposing the application to put evidence before the court that establishes a good reason for refusing it.[4] And the threshold for what constitutes a “good reason” is high.

Emotional attachment to the property? Not enough.[5] Significant personal hardship? Courts have acknowledged how difficult a forced sale can be while still ordering it.[6] Inability to afford a comparable property? Still not enough.

In other words, if your co-owner wants to sell and you don’t have an agreement that says otherwise, the Partition of Property Act is not your safety net. It’s a severance mechanism. And once it’s triggered, there may be nothing to stop it.

When Friendship Turns to Enmity

A case reported by the British Columbia Real Estate Association captures this dynamic clearly.[7]

Two couples, close friends, jointly purchased a Gulf Islands cottage, each taking a one-half interest. They were advised at the time to agree on a method for establishing the price of a half-interest in case one couple eventually wanted to sell. They didn’t.

When the friendship deteriorated, one couple petitioned the court under section 6 of the Act for the sale of the property and the equal division of proceeds. The other couple wanted to keep it and requested an order under section 8 allowing them to buy the petitioners’ interest at a court-determined price.

Section 8 can provide a mechanism for one party to buy out the other, but it requires the party who wants to keep the property to give an unconditional undertaking to purchase. If that undertaking isn’t given, or if the terms aren’t right, the section offers no protection.

The result: a property bought in friendship was liquidated by statute. A straightforward co-ownership agreement, one that addressed valuation, right of first refusal, and exit terms, would have given both couples a path through the disagreement without court intervention.

The Structural Parallel

If any of this sounds familiar, it should. I’ve written before about how founders lose control of their companies through poorly structured shareholder agreements. The dynamics are remarkably similar.

In a shareholders agreement, founders risk losing influence through veto rights they didn’t scrutinize, consent thresholds they didn’t negotiate, and exit mechanisms they didn’t anticipate. In a co-ownership agreement, the same structural vulnerabilities apply: who decides when to sell, who gets first right to buy, what happens when someone can’t pay their share of the mortgage, and how disputes get resolved before they reach a courtroom.

The difference is that most people understand, at least in principle, that starting a business with someone requires a written agreement. Buying a house with a friend or family member? Somehow, the expectation is that trust will be enough.

It won’t.

What a Good Co-Ownership Agreement Covers

A co-ownership agreement is not a relationship document. It’s a governance framework for a shared asset, and it should be treated as such. In my practice, I’ve seen disputes arise from nearly every gap in the list below. The common thread is always the same: the parties assumed that if they agreed on the big picture, the details would sort themselves out.

Ownership structure: joint tenancy or tenancy in common. Joint tenancy includes a right of survivorship: when one owner dies, their interest automatically transfers to the surviving owner(s). Tenancy in common allows each owner to hold a defined share and pass it to their beneficiaries through their estate. This is a fundamental structural decision with implications for estate planning, tax, and control. In most co-ownership scenarios outside of married or common-law couples, tenancy in common is the recommended structure.

Financial obligations. Who pays the mortgage, property taxes, insurance, and maintenance? What happens if one owner defaults? How are capital expenditures decided and funded? A new roof or a major renovation can test a co-ownership relationship as thoroughly as any market downturn.

Use and occupancy. If one party lives in the property and the other doesn’t, should there be compensation for exclusive use? How are decisions about renovations, tenants, or short-term rentals made? I’ve seen co-owners who agreed on everything at the outset find themselves in serious conflict over a question as simple as whether to list a spare room on Airbnb.

Exit and buyout mechanisms. If one owner wants out, what is the process? Is there a right of first refusal? How is fair market value determined: by appraisal, by formula, or by agreement? What timeline applies? This is often the most important section, and the one most often neglected. Without it, the Partition of Property Act becomes the default exit mechanism, and that means court.

Dispute resolution. If the owners disagree, where do they go? Mediation? Arbitration? Without a dispute resolution clause, the default venue is the Supreme Court of British Columbia, which means time, cost, and uncertainty.

Death, incapacity, and relationship changes. What happens if a co-owner dies, becomes incapacitated, or goes through a separation or divorce? These scenarios are uncomfortable to discuss at the outset. They are far more uncomfortable to address without a plan.

What a Good Agreement Prevents

The value of a co-ownership agreement isn’t just in what it says. It’s in the conversations it starts.

A well-structured drafting process requires co-owners to confront questions they might otherwise avoid: What are we building? What happens if our circumstances change? What happens if we disagree? What does fairness look like when we’re no longer aligned?

These questions are easy to answer when everyone’s on the same page. They become exponentially harder, and more expensive, once the alignment breaks down.

A good co-ownership agreement, like a good shareholders agreement, is designed to absorb stress. It doesn’t prevent disagreement. It prevents disagreement from becoming destruction.

And it costs a fraction of what a court application under the Partition of Property Act will run you, to say nothing of the relationship damage that litigation tends to leave behind.

The Deal That Survives the Relationship

Co-owning property with another person is, at its core, an act of shared optimism. You’re betting on the relationship lasting at least as long as the investment. Sometimes it does. Sometimes it doesn’t.

The question isn’t whether the relationship will be tested. It’s whether, when it is, you’ll have something to fall back on besides a statute that was designed to force a sale.

If you’re buying property with a friend, a family member, or anyone else, and you want to understand what a co-ownership agreement should look like for your situation, talk it through with a lawyer experienced in these kinds of governance frameworks. You’ll be glad you did.

---

[1]BCREA reports the average MLS® residential price in BC in January 2026 was $924,239. See BCREA, “2026 Kicks Off With Weak Sales Activity” (February 11, 2026) (https://www.bcrea.bc.ca/economics/2026-kicks-off-with-weak-sales-activity).

[2]RBC Economics, Housing Trends and Affordability, Q3 2025. Nationally, ownership costs stood at 53.2% of median household income. In Vancouver, that figure was nearly 68%. (https://www.rbc.com/en/economics/canadian-analysis/canadian-housing/housing-affordability/owning-a-home-became-more-affordable-in-canada-but-gains-are-slimmer)

[3]Partition of Property Act, R.S.B.C. 1996, c. 347.

[4]Ryser v. Rawlings, 2008 BCSC 1050 at para. 34. The BC Court of Appeal in Sahlin v. Nature Trust of British Columbia, Inc., 2011 BCCA 157 at para. 23, clarified that while there is no strict legal onus on the respondent, “in practical terms, it would be for those opposing the application to put before the court evidence tending to establish a good reason for refusing it.”

[5]Sundberg v. Sundberg, 2022 BCSC 2188: emotional attachment to the property, the inability to purchase the opposing party’s share, and the inability to buy a comparable property were found to be insufficient to resist a sale order.

[6]McRae v. Seymour Village Management Inc., 2014 BCSC 714 at paras. 39, 44–45. Justice Fenlon (as she then was) acknowledged the respondents’ difficult position but noted that shared ownership carries significant disadvantages, including the possibility of a forced sale by the other co-owners.

[7]Reported in BCREA Legally Speaking #395, “Partition of Property Act — When Friendship Turns to Enmity.” https://www.bcrea.bc.ca/legally-speaking/legally-speaking-395