Torres v. Parsons et al., 2025 ONSC 4593
Real estate transactional lawyers should take note of this Ontario Superior Court decision. It underscores the critical importance of documenting property ownership arrangements in writing, particularly in family or relationship contexts where tenants in common claim that their ownership share is greater than what was recorded on title.
Background
Peter Torres purchased a property in Brampton in 2018 for $822,000, putting down $450,000 (approximately 55% of the purchase price). While Torres held 99% of the title, his fiancée’s parents, Shawn and Charmaine Parsons, held the remaining 1%. The Parsons were added to title and the mortgage because Torres could not qualify for financing on his own.
The parties lived together on the property for just over two years until Torres’s relationship with Victoria Parsons ended in October 2020. When the parties moved in, Shawn and Charmaine paid Peter an amount equivalent to the monthly mortgage payment. They also paid for internet, cable, and groceries. Peter paid for utilities and property taxes. After Torres moved out, the property was eventually sold in 2022 for $1,655,500, with proceeds of approximately $1.2 million remaining in trust pending resolution of the dispute.
The Competing Claims
The Parsons family claimed there was an oral agreement entitling them to receive their mortgage payments back plus a 50/50 split of remaining proceeds. They alleged this agreement was reached before closing and modified after Torres discovered he couldn’t qualify for the mortgage alone.
Torres denied any such agreement existed, arguing the parties should receive proceeds according to their registered ownership interests: 99% to him and 1% to Shawn and Charmaine.
The Court’s Analysis
No Enforceable Agreement
Justice Lemay systematically analyzed the evidence and found no oral agreement existed. Several key factors influenced this conclusion:
Documentary Evidence: The lawyer’s file contained an acknowledgment signed by the Parsons stating they “did not contribute any of our own funds towards the purchase of the property” and that their “participation is for the sole purpose of assisting Peter Torres to qualify for the mortgage.” This directly contradicted their claim of equal ownership.
Lack of Corroboration: The Parsons claimed their lawyer initially prepared documents for a 50/50 split but changed them during the meeting to preserve tax benefits. However, nothing in the lawyer’s file supported this account, and the court found it implausible that such a significant change would occur without documentation.
Credibility Issues: The court identified credibility problems with all witnesses. Notably, Shawn claimed the grocery bill was $2,000 monthly, but the documentary evidence showed it averaged only $793 monthly.
November 2020 Recording: The Parsons relied on a surreptitiously recorded conversation from November 2020. While admissible, the court found it showed only preliminary discussions, not a concluded agreement. Critically, at one point the recording captured: “if we have an agreement,” indicating no final agreement had been reached.
Unjust Enrichment Claim Also Fails
The Parsons alternatively argued unjust enrichment. The court rejected this claim, finding:
- No Enrichment/Deprivation: The Parsons paid approximately 75% of monthly expenses while Torres paid 25%, which was proportionate given three people versus one. Their living expenses at the property were comparable to what they previously paid in rent elsewhere.
- Juristic Reason Existed: Torres was the property owner who had contributed the entire down payment. It was not unjust for him to benefit from capital appreciation while others paid living expenses roughly equivalent to rent.
The court distinguished cases like Khan v. Soares (2021 ONSC 2682) where equal contributions and clear evidence of shared ownership intention existed.
Practical Implications for Transactional Lawyers
This case reinforces several important lessons:
Document Everything: When clients are entering property ownership arrangements with family members or partners, insist on written agreements detailing ownership interests, contribution expectations, and what happens upon relationship breakdown or sale.
Beware of Title Arrangements for Financing: When parties are added to title solely to facilitate mortgage qualification, ensure this purpose is clearly documented. The acknowledgment in the lawyer’s file proved crucial to Torres’s success.
Trust Agreements: The lawyer’s file noted the parties were advised to enter a trust or ownership agreement but never did. When beneficial ownership differs from registered title, a formal trust agreement is essential.
Consider Future Scenarios: Agreements should address what happens if property values decline, not just increase. The Parsons couldn’t explain how losses would be shared, which proved fatal to their claims.
Litigation Risk Management: The court noted potentially aggressive litigation tactics, including withholding funds admittedly owing to Torres for over three years to pressure settlement. This may have cost implications for the unsuccessful parties.
Conclusion
Real estate transactions involving family members or romantic partners carry heightened risk of dispute. This decision demonstrates that courts will look to objective documentary evidence and registered title interests when oral agreement claims are disputed.
Transactional lawyers should proactively recommend formal co-ownership or trust agreements in these situations, clearly documenting each party’s contributions, ongoing obligations, and entitlements upon sale. The cost of proper documentation at the outset is minimal compared to the expense and uncertainty of protracted litigation years later.
