On marriage breakdown (not relationship breakdown), a key area of confusion and uncertainty for many separated spouses is what happens to the matrimonial home. Only married spouses can own or occupy a matrimonial home common law spouses cannot do so (Family Law Act).
Matrimonial home is defined by section 18 of Ontario’s Family Law Act:
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.
Practically, it is any property at the separation date that is ordinarily occupied by the spouses as their family residence.
Spouses can have more than one matrimonial home it is a fact-specific issue. For example, the home in town and the cottage could both potentially qualify as matrimonial homes, if the facts support that finding.
Depending on the facts, matrimonial homes can be treated differently in terms of what must happen to them on marriage breakdown.
Often they form part of the formulaic approach to property distribution and resolution under the Family Law Act, a challenging formula to understand and master for most (including many lawyers).
For many reasons, including emotional and financial, a spouse may not wish to leave, or refuse to list and sell, or wish to delay any disposition of a matrimonial home, often understandably.
Spouses can try to retain the matrimonial home, but if it jointly owned legally, Ontario law gives either spouse the right to seek a listing and sale of it. Often Judges are reluctant to order a listing and sale prior to a trial, but they will do so if the circumstances are appropriate.
If the home is jointly owned, both spouses have a statutory right to possess it both during marriage as well as after separation and neither can be forced to sell their half to the other. Spouses do not have a right of first refusal to purchase the matrimonial home from the other where it is jointly owned. In fact, in Ontario, the Partition Act gives the Court power to force the sale of a jointly owned matrimonial home, if the parties cannot come to a buy-out agreement, for example. Spouses are entitled to list the matrimonial home on the market in an effort to obtain the best market value, but a spouse will not be required generally to accept less than fair market value from the other spouse.
The Partition Act is only available in situations of joint ownership. Where the title to the matrimonial home is in the name of only one of the spouses, then the Partition Act does not apply. This does not mean that the other spouse has no claim against the matrimonial home. The non-titled spouse still has a claim to the equity from the property through the equalization process provided for under the Family Law Act. A spouse may also have equitable trust claims against the home, too. However, legal title matters. The non-titled spouse cannot force the titled spouse to sell the matrimonial home, or limit the ability of the titled spouse to keep it, sell it, refinance it or even make a gift of it, unless a Court order is made otherwise.
Buy-out decisions must be carefully planned and considered. Future projections on carrying expenses must be reviewed. A decision is often made about whether a spouse can reasonably afford the home, rather than have it sold, or sell the interest to the other spouse. Generally, the Court will focus mostly only on the real property value of the matrimonial home and the right of the other spouse to maximize their return from it. Uncommonly does the Court put emphasis on or stock in the importance and emotional value of the home to either spouse (or children), when it comes to addressing the property issues only.
If a spouse wishes to buy out the interest of the other in the matrimonial home, tactically, letting that be known can create unequal bargaining positions in the negotiations or litigation. The other spouse can, in effect, try to lever that desire to gain a tactical advantage sometimes this happens.
Usually there are several options to consider on marriage breakdown, with multiple factors to review, before any temporary or permanent decisions are made about the matrimonial home. An early decision can impact the final outcome, of course.
This WARDS PC BLAWG is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.
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