Four years ago, I purchased a house for my sister where I…

When I say, “I bought the house for my sister,” originally she was supposed to purchase the home in her name solely and be the sole name on the mortgage; this did not occur because she did not qualify for the mortgage very close to finishing up the sale. Originally, she was to borrow $10K from me for the downpayment- this did not occur.To close the deal, I ended up putting up nearly $20K to close the deal, with my sole name on title, and the sole holder of the mortgage on the property.In the mean time I have paid income tax on the income received from my sister, insurance, etc.If I wish to dispose of the property, I will also incur capital gains.I had been in talks with my sister to “gift” the house to her, after having covered all of my costs and applicable taxes. She had agreed in principle to my request, which would have gifted her over $100K in equity in the home and would allow her to hold tile exclusively and acquire a mortgage in her name. Then I received the lawyer’s letter.Now there is a contention - from her lawyer - that she has an ownership interest based on a scenario that never occurred.Here is the text content of the lawyer letter received by email:“Please be advised that this firm has been retained by Katie Hogan, your sister, to represent her in her claim for breach of contract in relation to your March 30, 2016 agreement (the “Agreement”), to transfer title to the property at 129 -***** Langley, B.C. (the “Property”), to Ms. Hogan, should she fulfill certain obligations.
The Agreement saw you secure a mortgage and provide a portion of the down payment for the Property (the “Initial Investment”). The Agreement allows for Ms. Hogan to pay back your Initial Investment, with interest, within five years of the purchase of the Property and register a new mortgage on the Property, essentially buying you out and putting Ms. Hogan on title.
Aside from a 3% per annum interest on the Initial Investment (the “Interest”), and the five-year limitation period, your Agreement does not place any conditions on Ms. Hogan paying out the Initial Investment and your mortgage on the Property. There is no allowance in the Agreement for you to share in the increased value of the Property if Ms. Hogan is able to buy you out within five years of the purchase of the Property or any requirement for Ms. Hogan to show financial security before transfer of title.
Unfortunately, when Ms. Hogan informed you, in or around April 2020, that she had obtained mortgage approval for the Property, which would see your Initial Investment paid out with Interest, you responded in an email, dated April 20, 2020, that you would like her to “pay off [her] $10K credit card in the next year” and to “get [her] on a disciplined plan so [that she does] not end up in that predicament again”, before you will consider transferring title to her. Although these are laudable goals and ones that you believe will be beneficial for your sister, they do not make up any part of the original Agreement. As such, you are in breach of your contract with Ms. Hogan.
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Please note, Ms. Hogan would rather avoid litigation in this matter. She has nothing but good things to say about you and the close sibling relationship you have had throughout your lives. She recognizes and is immensely grateful for the help you have afforded her in securing the Property for her and her children to live in. Although she has been making the mortgage payments and paying for improvements to the Property, she understands that she would not have been in a position to purchase the Property had you not been kind enough to assist her.
Although I am a litigator and much of my job consists of representing my clients in court, I find that in most situations it is best when parties can come to an amicable resolution to a problem. Most people do not realize how distracting and time- consuming legal disputes can be until they are going through one themselves. The resulting loss of time, energy, and money can wreak havoc on your life and, all too often, your relationships as well. You sister would like to continue the warm and close relationship she has with you.
Ms. Hogan has been ready, willing, and able to complete her obligations, but you have refused to uphold your end of the Agreement. If you continue to refuse to adhere to the Agreement, Ms. Hogan will seek an appropriate remedy in court, which may be an order that you perform your contractual obligations (specific performance), and in the alternative, damages or restitution. As Ms. Hogan and her children have made the Property their home for many years, specific performance is her preferred remedy.
I know that you and Ms. Hogan have had substantial communications since April 20, 2020, but these communications do not alter the basic nature of this case. Ms. Hogan would like you to reconsider the position you have taken and allow her to proceed with reimbursing your Initial Investment,Cont’d“paying out the current mortgage, and taking title to the Property. She is also willing, separate and apart from the Agreement, to discuss making you whole for any negative tax implications you may be facing due to the transfer of title to the Property.
Please confirm your willingness to proceed with the said transfer, and I will have a colleague prepare all the necessary documents. If we do not receive such confirmation by November 5, 2020, we will initiate an action in the Supreme Court of British Columbia.
If you have any questions or concerns, please do not hesitate to contact me.”

There is no written agreement on the purchase.She has made all the payments related to the mortgage and condo fees, which I declare as income and have paid income tax with CRA.

There is no agreement on the tax consequences.

who owns the house? Who does the bank go after for the mortgage?So, I have title and the burden of the mortgage, but no equity?She placed zero equity in the home and I have significant tax burdens that need to be covered.

Wish I had never purchased the home.May I assume the home as my principle residence, as I do not currently own a home?

Given the above, do I have the right to sell the home as the sole owner on title?