As transactional real estate lawyers, we draft Agreements of Purchase and Sale with the expectation that our clients will honor the terms we’ve negotiated. But what happens when a relationship sours, co-owners seek partition, and those carefully crafted schedules become litigation fodder? The Ontario Superior Court’s recent decision in Rizzo v. Daniel, 2025 ONSC 6286, offers important lessons about how purchase obligations can follow properties through partition sales, even over a vendor’s objections.
The Facts
Michelangelo Rizzo and Tara-Lee Daniel were common-law spouses who purchased a $3.1 million cottage property at Trent Lake in 2021 as 50/50 tenants-in-common. The purchase was funded by Rizzo, but Daniel co-signed the mortgage when Rizzo couldn’t qualify alone.
Here’s where transactional lawyers should pay attention: Schedule C of their Agreement of Purchase and Sale contained detailed provisions about a potential right-of-way crossing the property. The schedule acknowledged that neighbouring properties might access their cottages via a driveway through the purchased property. Critically, the buyers agreed that if the neighbours completed surveying and Planning Act processes by November 17, 2024, the buyers “for themselves and successors in title” would cooperate to grant a permanent right-of-way. The schedule explicitly stated it would “enure to the benefit of and be binding upon the heirs, executors and assigns of all parties.”
After the relationship ended in September 2022, Daniel stopped using the cottage and asked Rizzo to remove her from title and the mortgage. He refused. The neighbouring cottage owners then sued both Rizzo and Daniel for specific performance of Schedule C, among other claims.
The Partition Application
Daniel brought an application under the Partition Act for the sale of the cottage. She settled with the plaintiff neighbours, agreeing to seek a court order requiring any subsequent purchaser to sign the planning application and cooperate in granting the right-of-way, which was essentially the same obligation she and Rizzo had accepted in Schedule C.
Rizzo eventually agreed the cottage should be sold but opposed paragraph 1(e) of the proposed order, which would bind the purchaser to the right-of-way obligation. He argued this would reduce the sale price and effectively grant judgment to the neighbours without a full trial.
The Court’s Decision
Justice Sheard granted the order including paragraph 1(e), and the Divisional Court upheld this decision on appeal.
The courts made several key findings relevant to transactional practice:
First, the original purchase price likely reflected the right-of-way. The Application Judge reasoned that any diminution in market value from the potential right-of-way had already been reflected in the $3.1 million purchase price Rizzo and Daniel paid. Including the same terms in the resale wouldn’t cause additional prejudice.
Second, including the term would facilitate, not hinder the sale. Rizzo provided no evidence that paragraph 1(e) would negatively affect the sale price. Conversely, omitting it could create uncertainty, potentially resulting in a certificate of pending litigation being registered against title, which would definitely interfere with the sale.
Third, the Partition Act empowers courts to settle all issues necessary to effect a sale. The court had jurisdiction to impose reasonable terms that would achieve the highest possible sale price and a fair outcome for both co-owners.
Fourth, this wasn’t premature determination of the neighbours’ claims. The Toronto action involved declaratory relief and damages that weren’t being addressed in the partition application. The court was simply ensuring the sale proceeded on similar terms to those the owners had originally accepted.
Takeaways for Transactional Lawyers
- “Successors and assigns” language matters a lot. When you draft provisions stating obligations run with the land or bind successors, assume courts will enforce that language, even in partition sales. Consider whether your client truly intends such permanence.
- Schedule C is not throwaway language. Vendors often view schedules dealing with potential easements or access issues as boilerplate to get the deal done. This case shows those provisions can have lasting consequences, especially when relationships deteriorate.
- Advise clients about future enforceability. When representing buyers accepting obligations that run to successors, ensure clients understand these may bind them even if they later sell under court order. When representing sellers, consider whether making such commitments could reduce future sale flexibility.
- Partition sales don’t provide a fresh start from purchase obligations. Don’t assume a court-ordered partition sale will allow your client to walk away from commitments made in the original APS, particularly those explicitly binding successors.
- Document the impact on purchase price. If your client is accepting an easement, right-of-way, or similar encumbrance, document any reduction in purchase price. This evidence could be valuable if its effect on the property’s market value ever becomes an issue in future litigation.
Rizzo v. Daniel, 2025 ONSC 6286 is a reminder that in real estate, the past is rarely past. Those schedules you negotiate today may be litigated tomorrow. What you agree to in your APS, particularly in schedules dealing with rights that benefit third parties, may well survive relationship breakdowns, partition applications, and your client’s second thoughts. Draft accordingly.
