Debt Enforcement And Jointly-Owned Property – Lessons From A Recent Decision

This column was originally published on RENX.ca

In the case of joint property ownership, where one party is indebted to an external creditor, what rights does the creditor hold when the property is sold? The Ontario Court of Appeal recently clarified this, concluding that creditors are only allowed to claim against the debtor's divisible interest in the property. This verdict not only safeguards joint property holders who are not in debt, but also emphasizes the boundaries on creditors' claims.

In Senthillmohan v. Senthillmohan, a separated husband and wife found themselves in a legal battle over the division of their net family property and the sale of their matrimonial home. An order was granted directing the sale of the home and that the net proceeds be held in trust pending further agreement or court order.