What if one co-owner wants to sell and the other doesn't?

This should be addressed in the co-ownership agreement before purchase. The agreement can set out how the property will be valued, whether one owner has the first opportunity to buy the other out, and what happens if neither can agree. Without a clear agreement, co-owners can face a difficult legal dispute or even a forced sale.

What should an exit clause in a co-ownership agreement include?

How the property is valued, usually by independent appraisal; who gets first refusal to buy the other out; how long they have to arrange financing, commonly sixty to ninety days; what happens if they cannot finance it, usually a sale with proceeds split by ownership share; and how disputes are resolved, ideally by mediation or arbitration before litigation.

Can I use the 95% spousal buyout programme to buy out a sibling?

Generally no. The insured programme allowing up to 95% of value is specific to separating spouses. A buyout between siblings or friends is normally treated as an ordinary refinance, subject to the usual 80% ceiling - which means it needs more equity than people expect.

Answers › Buying With a Family Member

What happens if one of us wants to sell later and the other doesn’t?

Answered by Rajiv Verma, Mortgage Broker · Reviewed 18 August 2026 · About a 3 minute read

The direct answer

This should be settled in the co-ownership agreement before you buy. The agreement can set out how the property will be valued, whether one owner gets first opportunity to buy the other out, and what happens if neither can agree. Without a clear agreement, you could face a difficult legal dispute or even a forced sale. A little planning at the beginning prevents a far bigger problem later.

THE SHORT VERSION

Decide it before you buy, while everyone is reasonable
The agreement should fix how value is determined
And whether there’s a right of first refusal to buy the other out
And what happens if you can’t agree
Without it: a legal dispute, or a court-ordered sale

Why this is the question that causes the trouble

Everything else in co-ownership is manageable. Bills get split, repairs get argued about and resolved.

Exit is different, because the interests genuinely conflict. One person needs their money out — a job, a relationship, a change of plan. The other wants to keep the home. There is no natural compromise, which is exactly why it needs deciding in advance.

The agreement is written when everyone is being reasonable. That is its entire value. Nobody negotiates a fair exit clause in the middle of the argument that requires one.

What a good exit clause covers

How the property gets valued. Usually an independent appraisal, sometimes an average of two. Naming the method prevents the argument entirely.

Who gets first refusal. Typically the remaining owner gets a defined window to buy the other out at the agreed valuation.

How long they have. Enough time to arrange financing — sixty or ninety days is common. An open-ended right helps nobody.

What happens if they can’t finance it. Usually the property goes to market, with proceeds split per the ownership shares.

How disputes get resolved. Mediation or arbitration before litigation is far cheaper than the alternative.

The financing reality of a buyout

Buying out a co-owner means qualifying for the whole mortgage alone. That’s the practical test, and it’s worth knowing where you stand long before it arises.

It’s the same structural problem as a spousal buyout — though note the 95% insured programme is specific to separating spouses. A buyout between siblings or friends is generally treated as a normal refinance, with the usual 80% ceiling.

That difference matters. It means a co-owner buyout needs more equity than people expect, and it’s a good reason to keep the borrowing conservative at purchase.

What happens without an agreement

Negotiation, if you’re fortunate. Two reasonable people can usually reach terms.

Legal proceedings, if not. Co-owners in Ontario have avenues to force a resolution, which can end in a court-ordered sale — on the court’s timetable, with legal costs, and usually a worse price than a planned sale.

That outcome is entirely preventable for the cost of a properly drafted agreement.

What to check before you buy together

Is there a written co-ownership agreement, drafted by a lawyer?
Does it name a valuation method?
Is there a right of first refusal, with a time limit?
Could either of you realistically qualify alone to buy the other out?
Are you buying with enough equity margin for a buyout to be financeable later?
Have you both had independent legal advice?

What to do next

If you’re buying together, get the agreement drafted before the offer. I’ll tell you what the mortgage side needs to look like so a future buyout is actually financeable — which is the part a lawyer won’t cover.

If you already own together and there’s no agreement, it’s not too late to put one in place. Much easier now than during a disagreement.

Talk it through →

Related questions

Answered by Rajiv Verma, Mortgage Broker · Mortgage Architects — FSRA Brokerage Licence #12728 · Licensed in Ontario · Office 289.505.0631 · Direct 647.291.7116

General information about Ontario mortgages — not financial, legal or tax advice. Co-ownership agreements, dispute resolution and remedies available to co-owners are legal matters for a lawyer. Every file is reviewed individually.