What happens to a shared matrimonial home during a divorce is one of the most immediate and important concerns facing our clients – it has great emotional and financial meaning to both spouses and is regularly a topic of contention.
In Ontario the matrimonial home has special rules drawn up by the Government specifying what should happen to it during the divorce process – and we can help you get more information on this complex topic.
What is a matrimonial home?
Section 18(1) of Ontario’s Family Law Act states that 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.
This means that if you buy a house before you get married and your spouse then moves in afterwards, this house becomes your matrimonial home because it is the ordinary residence of both you and your spouse.
However, if you have a property that you rent out and don’t live in normally, this is not covered by the “matrimonial home” designation and will be treated like any other asset in the family decision process.
When it comes to Property Division, how is the Matrimonial Home treated?
First of all, we’ll explain how property division works:
- Each party determines their net family property by taking their total assets on the date of separation and subtract their total debts, as well as anything exempt from property division, such as inheritance or gifts.
- Each party then subtracts the value of their pre-marriage assets from their date of separation property.
- The party with a higher net family property is responsible for paying half the difference between the two amounts. This is called an equalization payment.
The matrimonial home is given special treatment within property division in several respects. The first is that if a party owned the matrimonial home on the date of marriage, the pre-marriage value of the home cannot be subtracted.
A further issue arises if you inherit a house and then decide to use it as your family home. The house will lose its exemption if you and your spouse decide to live there. For example, if your mother leaves you a beautiful home in Mississauga, Ontario, and you decide to live there with your spouse and kids, the entire value of that property counts in your net family property calculation for purposes of equalization.
What Does Possession of the Matrimonial Home Mean and Should I be Concerned?
Both you and your spouse have an equal right to possession of the matrimonial home while you are married, regardless of who is the legal owner of the matrimonial home. This means that you cannot exclude your spouse from the matrimonial home, even if you own it. This applies after separation until you are divorced or there is a separation agreement or court order that addresses this issue.
That being said, one spouse may apply to the court for exclusive possession of the matrimonial home, meaning that regardless of ownership, one party can be excluded from the property for a period of time via court order. It should be noted that a spouse to whom exclusive possession is ordered may be required to pay occupation rent to the non-occupying spouse.
We can’t agree what to do with the matrimonial home – what do we do?
If the parties both have a property interest in the home and are unable to agree on a course of action, one party can apply to court for a partition and sale order. The court will order the house be sold.
It is important to note that there is no right of first refusal within family law, so if the house is ordered to be sold, the party wishing to stay must bid on the open market with all other buyers.
I already own a home and am going to get married – how can I protect it if the worst happens?
If you already own a home or want to buy a home for you and your current or future spouse to move in with, it’s worth considering a domestic contract with your spouse that sets out each party’s rights and obligations upon separation.
Get clarity on your position – talk to us!
If you have a home and want protect your property, we have helped our client negotiate and draft domestic contracts (separation agreements, cohabitation agreements and marriage contracts). We can provide clarity for your unique situation and help you navigate your issues in clear and professional manner.