Handling of The Matrimonial Home
Part II of the Family Law Act is dedicated specifically to the matrimonial home and the possession, designation and alienation of it. This part, according to s. 28(1), only applies to matrimonial homes that are located in Ontario. All other “matrimonial homes” located outside of the province are excluded from this part and should be considered under part I which deals with family property generally and net family property calculations.
You should also keep in mind that the applicable definition of spouse in this part is that found in s. 1(1). Therefore, common law couples are excluded from the rights and obligations associated with the matrimonial home as well.
In proceedings dealing with family property and the division thereof, the house in which the couple cohabited is known as the matrimonial home. Spouses may own more than one matrimonial home and it may consist of either real or personal property. All that matters is that the couple or family occupied the piece of property during the marriage and at the time of separation.
The matrimonial home may either be owned fully by one of the two spouses or jointly by both. If a matrimonial home is owned by a corporation of which the spouses are shareholders, and as a result of that status they are able to occupy it, then it may still be deemed a matrimonial home and treated accordingly for the purposes of possession and equalization (which means that it cannot be excluded).
A 2006 Ontario Court of Appeal decision stands for the proposition that if the owner of a share or shares in the corporation has a controlling interest so as to enable him or her to vote his or her shares so as to give a right of residence, then the owner has an interest in the property for the purposes of the statute. Therefore, legal control over the corporation amounts to legal control over the residence for the purposes of the matrimonial home provisions.
There is a special consideration when the matrimonial home is located on property which is normally used for a purpose other than residential, i.e. a farm to grow crops for sale. Essentially, in cases such as the aforementioned the matrimonial home will consist only of the part of the property that may reasonably be regarded as necessary to the use and enjoyment of the residence.
Spouses may also choose to designate a piece of property as a matrimonial home, even neighboring property, and then register it in the proper land registry office. When both spouses designate a particular piece of property as a matrimonial home then any other property which would otherwise qualify as such ceases to be until there is a cancellation of the designation. However, the effect of designation differs when it is executed by one spouse because in that case the piece of property becomes a matrimonial home in addition to any other property that satisfies the s. 18 definition. Therefore, the properties cannot be excluded from net family property calculations and the spouses may be able to get orders for exclusive possession. Spouses, under subsections (6) and (7) are authorized to cancel a designation which may allow other family residences to regain their status as matrimonial homes.
Cancellation of designation
Spouses are also not authorized to sell or encumber an interest in a matrimonial home pursuant to s. 21(1) unless:
the other spouse joins in the instrument or consents to the transaction;
the other spouse has released all rights under this Part by a separation agreement;
- a court order has authorized the transaction or has released the property from the application of this Part; or
- The property is not designated by both spouses as a matrimonial home and a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled.
- Furthermore, any transaction executed that does not comply with s.21 may be set aside by the court pursuant to s. 23(d) unless the person to whom the property is sold or encumbered has acquired it for value, in good faith and without notice that at the time of the transaction it was a matrimonial home.
The following are the other orders that a court may make when there is an instance of alienation that seems to be contrary to s. 21:
Powers of court respecting alienation
A transaction will not be set aside if the spouse selling or encumbering the property proves that:
- At the relevant time he or she was not a spouse (thereby allowing him or her to dispose of the property, see: s. 19(2))
- the property was not ordinarily occupied by the spouses as a family residence
- The property was not ordinarily occupied by the spouses at the time of separation
- there is other property designated as the matrimonial home (and the designation has not been cancelled)
- the other spouse has released all rights under part II of this Act
- However, none of the aforementioned will apply if the person to whom the property is sold had notice to contrary, i.e. knew that the person selling the property was a spouse and that the property was a designated matrimonial home.