As we explained recently, courts in Alberta and across Canada are only hearing and deciding matters deemed as “urgent” as a result of the COVID-19 pandemic.
A recent decision, heard by teleconference, deemed an application by a wife to sell the home she shared with her ex-husband as an urgent matter.
The parties divorced in 1994. Despite the divorce, the husband and wife continued to live together until September 18, 2018, when the husband was forced to leave the home as a result of criminal charges alleging domestic abuse.
The home was owned by the husband and wife as joint tenants.
The wife filed an application seeking an order for leave to proceed on an urgent basis in advance of a case conference and for the sale of the parties’ jointly owned property, including the authority to arrange for the sale without the consent or participation of the husband. When the wife filed her original application in December 2019, she did not seek the sale of the home, but she stopped receiving disability payments shortly thereafter, putting her in a position of financial urgency.
The husband opposed the wife’s application. He argued that the matter was not urgent, citing a press release from the TD Bank, the mortgagee, dated March 24, 2020, stating that TD is committed to working with personal banking customers to help them through the COVID-19 crisis, which relief includes up to a six-month payment deferral for mortgages. In addition, he provided a press release from the city of London indicating that interest and penalties for unpaid 2020 property tax installments due on March 31, 2020 would be waived for 60 days. He also relied on an article from the Canadian Real Estate Magazine dated March 26, 2020, indicating that real estate prices will be down and it is not a good time to put a house on the open market. Finally, he provided a press release from the Ontario Real Estate Association dated March 24, 2020, indicating that there are restrictions on open houses and showings.
The husband also argued that the application was malicious, vexatious and oppressive.
Finally, the husband stated that he wanted the option to purchase the wife’s interest in the property using the value of $750,000. He requested 45 days to ascertain if he could arrange financing (by himself or with help), and if not, to list the property cooperatively, still giving him the option to purchase.
First, the court had to determine whether the matter of selling the home qualified as “urgent” under the court’s COVID-19 directive.
The court found that the parties were at risk of losing some of their equity if TD Bank forced a sale. It stated that while the wife had been working with TD prior to the COVID-19 crisis, and the bank had allowed her two months to sell the property herself before they took any enforcement measures, she had now been in default for four months and had been unable to gain the cooperation of the husband to put the house on the market.
The court then stated:
“The [husband] argues that due to the announcements of TD and the city of London with respect to COVID-19, the urgency is gone. With respect, the press releases and articles submitted are not evidence. These are novel times – the court is not in the position to take judicial notice that mortgagees are not enforcing their security. There is no way to know if the parties will be given any relief on their mortgage due to their persistent default prior to the pandemic. […]
The parties’ default continues. Fees, penalties and interest continue to accumulate, further eroding their equity. Neither party can maintain the mortgage. The urgency is immediate, material and particularized in the evidence. The [husband]’s response is to wait longer. This is not tenable. The house has been empty for many months and the [husband] did nothing to deal with it. While limited case conferences are now available, none are available until June 2020. This is too far away. The current COVID-19 crisis is not to be used as a tool to shirk a party’s financial obligations within a family law proceeding.”
As a result, the court found the matter to be one of urgency.
After reviewing the relevant legislation, the court gave the wife authority to deal with the sale of the property as long as the listing price and sale price did not fall below the amount of $750,000. If it did, the consent of the husband would become necessary. The court also gave the husband until May 8, 2020 to secure financing and reach a suitable resolution with the wife if he wished to purchase the property himself. If he was unable to do so, then the property would be immediately listed and he would become free to make an offer along with any member of the public.
DBH Law recognizes that there continues to be a growing concern in Alberta and abroad about the spread of COVID-19. We have implemented several measures to reduce the risk and impact to our employees, clients and the community at large.
Please be aware that we are prepared to initiate business continuity protocol for remote work and communications. It is our priority to ensure business continuity for our clients while ensuring the safety of our people. We recognize that the outbreak of COVID-19 is an unprecedented situation globally and we wish to assure you DBH Law is equipped and prepared to maintain and continue business services to our clients during this pandemic.
At DBH Law in Calgary, our real estate lawyers have more than 25 years of combined experience acting for purchasers, lenders, and developers through all stages of real estate transactions.
We help our clients avoid huge areas of risk, including poorly drafted or incomplete agreements of purchase and sale, hidden fees, encroachment or easement issues, complex concerns like properties held in trust, and similar pitfalls. We also look for contract language which may impose unfavourable duties or obligations. To learn more about how we can help, contact us online or by phone at 403.252.9937.