The family home is often one of the most treasured assets that a couple owns. Subsequently, it may become the source of a great deal of conflict upon divorce where the parties are deciding how the home should be handled, and if either of them will “get the house” or sell it.
What is a Matrimonial Home?
Under Part I- Family Property, the Family Law Act (“FLA”) sets out that the matrimonial home cannot be excluded from the equalization calculation between spouses. More specifically, the spouses must include the values of the matrimonial home at the date of separation. For more detail about how the matrimonial home and other real estate assets figure into the equalization calculation, see our blog entitled “Dividing Real Estate Holdings in a High-Asset Divorce”.
The matrimonial home is further governed by Part II of the FLA. Section 18 (1) defines a matrimonial home as “Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home”.
If your home falls into the above definition, then both spouses have an equal right to possess the home pursuant to Section 19(1) of the FLA. This means that no matter the actual title ownership of the house, neither spouse can force the other spouse to leave the house. Nor can they unilaterally sell, mortgage, rent or change the locks of the home. The exception to this arises if the Court grants an Order for Exclusive Possession of the matrimonial home to one of the spouses.
Exclusive Possession of the Matrimonial Home
Section 24 of the FLA enables a spouse to apply, through Application or Motion, to the Court for an Order of Exclusive Possession of the home. When determining whether to grant such relief, the Court considers the following factors:
- The best interests of the children;
- Any existing Court Order regarding property or support;
- The financial position of the spouses;
- The existence of a written agreement between the parties;
- The availability and suitability of other accommodations; and,
- The existence of family violence committed by a spouse.
It is most often that Courts grant such Orders for Exclusive Possession where there is domestic violence being committed by one spouse toward the other or toward the children. However, this is not a permanent Order, and it does not change the structure of the house’s ownership, nor its inclusion in the equalization calculation.
As such, an Order for Exclusive Possession is not going to guarantee that the spouse who is granted that possession will be able to “get” the house as part of the final resolution of the matter.
Strategies to “Get” the House on a Final Basis
Obtaining ownership rights to the house and “getting” it on a final basis upon the resolution of a separation matter are largely matters of strategy and negotiation.
Even where one spouse is solely on title to the matrimonial home, they may need to sell the house so they can obtain the cash fluidity to pay their spouse an equalization payment that may be owing to them. For many individuals, the easiest way to access such funds is to use the proceeds of sale from the house. Some individuals in this position will pursue refinancing their mortgage in order to fund an equalization payment owing to their spouse, while avoiding selling the house. Spouses who are not on title or are only jointly on title may also seek refinancing to purchase the other spouse’s interest in the house.
Obtaining a property appraisal is therefore an important step in such negotiations. Each spouse may obtain their own appraiser, or they might jointly retain an appraiser to provide them with an estimate of market value of the home, at a certain point in time. Such appraisals can be used as a starting point for the negotiation of a buy-out price for the home. It can also be used as a like starting point to negotiating the value which is to be assigned to the house at the date of marriage and at the date of separation.
It is also prudent for a spouse to keep track of the carrying expenses that they pay for the house, after the separation, and before there is a final resolution of the matter. Such costs can include things like mortgage payments, hydro, water and heating bills as well as insurance premiums for the home. If you are the spouse paying for more than your appropriate share of these costs, the amounts which should have been paid by the other spouse can be added together and be applied to reduce an equalization payment owing from one spouse to the other. They can even be used to reduce the purchase price for the buy-out of the house by one spouse, if such an arrangement is sought.
There are also more complex claims that can be made by spouses in the aim of reducing or increasing the value to be assigned to the home. One such strategy is for a spouse who is not residing at the matrimonial home to claim the other spouse owes them occupation rent for the post-separation period where their spouse continued to live at the home. In simple terms, occupation rent compensates the spouse who vacated the home, for the time where they were deprived of the enjoyment and benefit of living in that home. Because this remedy is highly discretionary rather than automatically imposed by the Court, it is prudent that you seek the advice of a licenced Family Law Practitioner to understand your options.