Thursday, February 23, 2006

The Matrimonial Home in Ontario

FAQ REGARDING THE MATRIMONIAL HOME

My spouse and I are married, and are splitting up. The matrimonial home is registered in my name alone. Because the house is registered to me alone, can I make my spouse leave the home?

Under the Ontario Family Law Act, the matrimonial home has special status, and is treated differently than other assets owned by married couples.

In Ontario, assets are equalized when a marriage breaks down (see my FAQ "Property Issues and Filling out Financial Statements"). The ownership of the assets doesn’t change, and the right to possess the assets ordinarily goes to the spouse who owns them. For example, if you own a car, and your marriage breaks down, you still own the car after the breakdown of the marriage, and as long as your name is the only one on the permit, you are the only person allowed to possess the car.

The matrimonial home is treated as an exception to this rule under the FLA. No matter whose name is on the Transfer/Deed to the matrimonial home, BOTH PARTIES HAVE A RIGHT TO POSSESS THE HOME UPON MARRIAGE BREAKDOWN.

If the parties agree that one spouse should live in the home exclusively, they can sign a separation agreement granting that spouse exclusive possession. This means that the other spouse is no longer allowed to enter the home without the permission of the spouse in possession.

If the parties cannot agree which one should live in the home, an application can be made to Family Court for an order for exclusive possession pursuant to s. 24 of the Family Law Act. These orders are not easy to get. The court will have to be satisfied that it is in the children’s best interests that one of the parties be excluded, among other things. In general, there must be a case involving high conflict, domestic abuse, substance abuse, abuse of the children, or similar extreme facts before a judge will consider excluding one spouse from the matrimonial home.

My common law partner and I have been living together for 15 years. The house is in his name. I’m a half owner of it now, right?

WRONG. First of all, under the legislation, only married people can have a matrimonial home. If you never married, you have no "matrimonial home".

This means that upon breakdown of the common law relationship, you have no right to possess a home you don’t own. More importantly, it means that you have no automatic right to claim any share of the home as an owner, "half" or otherwise.

Unmarried common law couples can always ask the court for an order that they should own a share of the home on the basis that they contributed money or money’s worth to the home (resulting trust), or that they have done work in the family setting that "unjustly enriched" the spouse who owns the home, and that the non-titled spouse should be compensated by being given a share of the home. These kinds of claims are highly fact-driven, which makes them expensive to take to court. The outcome is also uncertain in most cases.

Unmarried couples can also execute an agreement(a cohabitation agreement) that says what they want to do about their family residence if their relationship breaks down (s. 53 of the FLA). They can provide for a division of the home’s value, and they can say who will live in it, and for how long.

The lack of a legislative right to possession of the family residence for unmarried cohabitatants is an issue that remains unaddressed in our current provincial legislation. With a growing proportion of couples choosing to live common law, the issue really needs to be given some thought by the provincial government.

My wife and I are married and are splitting up. I owned the matrimonial home on the date of marriage, and had about $50,000 equity in it. Can I subtract that amount from my Net Family Property so I don’t have to share the pre-marriage value of the home with my wife?

NO. If this were any other asset but the matrimonial home, the answer would be yes (see my Post "Property Issues and Filling Out Financial Statements").

The matrimonial home is defined as the home the spouses are living in on the date of separation. If you brought the home into the marriage, and you and your spouse are still living in it on the date of separation, it is a "matrimonial home" under the legislation, and you cannot exclude its pre-marriage value from equalization.

If, however, you brought the home into the marriage, sold it, and put all of the proceeds into a new home, which you are living in with your spouse on the date of separation, the new home will be the matrimonial home, and the old home, the one you brought into the marriage and sold, will have lost its status as a matrimonial home. You can, in this situation, deduct the pre-marriage value of the home you brought into the marriage.

My husband and I have a cottage and a home in the city. Which one is our matrimonial home?

Both homes may be matrimonial homes. It is possible to have more than one matrimonial home under the legislation.

If you and your spouse customarily lived in the city home in the winter, and the cottage in the summer during the marriage, then both homes may qualify as matrimonial homes. This will be so no matter which of the two homes you and your spouse are actually occupying on the date of separation.

But I inherited the cottage during our marriage! Can’t I exclude it from my Net Family Property?

Not if it is a matrimonial home. Unlike other assets, matrimonial homes cannot be deducted as pre-marriage assets, nor can they be excluded as gifts from third parties given during the marriage.

I want to make sure I don’t have to share the value of the matrimonial home with my spouse. How can I do that?

You and your spouse can sign a domestic agreement either before or during your marriage which allows you to keep the value of the home to yourself. Some couples decide to share part of the value with their spouses in their agreements, to compensate the spouse who is not on title for contributions to the home. But in your agreement with your spouse, you can make any decision you and your spouse want to make about the value of the matrimonial home. If the agreement is made before or during the marriage, any provision in a domestic agreement in which a spouse gives up the right to possess the home is unenforceable. Spouses can (and frequently do) give up the right to possess a matrimonial home in a separation agreement as part of a global settlement.

Can my spouse and I just do an agreement ourselves?

Please see my Post regarding Home-Made Separation Agreements. You can - but there are a number of formal requirements to make the agreement enforceable. It is almost never a good idea to create on your own a document that has the potential for expensive and far-reaching consequences. Each of you should retain a separate lawyer to review what you are trying to accomplish in the agreement, and to draft it for you.

Dealing with issues related to the matrimonial home or family residence is complicated. You should consult a lawyer before signing any documents, or making any commitments related to your home and your rights to it.

Mary-Jo Maur
Barrister & Solicitor
151 Wellington Street #1
Kingston ON K7L 3E1
(613) 530-2665 (voice)
(613) 530-2241 (fax)

E-mail me!

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