Section 18(1) of the Family Law Act defines a “matrimonial home” as:
More than one home can qualify as a matrimonial home under this definition, for example a cottage property. It only applies to homes in Ontario.
Spouses as defined by the Family Law Act have a right to equally divide the value of the Matrimonial home, but please note that special rules apply to this asset. When domestic partners are not “spouses” under the Family Law Act, different rules apply – for example in the case of Common Law couples.
Unlike other property, a spouse cannot deduct the Matrimonial Home’s value as of the marriage date. This applies even if that spouse brought it into the marriage.
If spouses jointly own the home, then half of its value goes into each spouse’s net family property.
When only one spouse holds title to the home, spouse on title must declare its entire value for property division. This results in an increase in the net family property of the titled spouse. An equalization payment then redistributes the value equally between the spouses.
The value of the home will generally crystalize as of the date of transfer or sale. Note that most other asset values are determined as of the date of separation.
Typically spouses are expected to equally contribute to any mortgage, insurance and property tax payments on a the home. Sometimes one spouse pays all these expenses after separation. In this case, the spouse who pays can often obtain reimbursement for the other spouse’s half of the amounts paid. Other adjustments may also arise, depending on the particular circumstances of the spouses. Since spouses share in the home’s value, they also have corresponding obligations to share in the associated expenses.
In either case, the parties might negotiate and agree to a mutually satisfactory “buyout” proposal. This involves one spouse buying out the other spouse’s interest for a negotiated amount. Neither party has the right to a buyout, so any buyout requires agreement between the spouses. Otherwise a court might determine this issue as part of the equalization process after trial.
When a buyout is not agreeable, available, and/or desirable, then the home must be sold. A spouse’s rights and options depend on which spouse holds title to the home. Forcing a sale may also depend on the best interests of any children in the home, or other factors.
In the case of joint ownership, either party can apply for sale of the home under the Partition Act. If this motion has no malicious intention, and its sale does not affect any children involved, then the court should order the partition and sale of the matrimonial home. Note this is the starting point, but other considerations could also apply. Often the court will order the net sale proceeds “held back” pending further agreement or court order.
In cases of a matrimonial home registered in the name of only one party, things get a bit more complicated. If the titled party wishes to sell the home, he/she can seek permission to sale without the other’s consent.
Conversely, the non-titled party cannot force the sale of the home. For this to happen, the court must declare that he/she has an interest in the property. The non-titled party can still receive half of the value of the property through the equalization process. The facts of the specific case will determine whether the non-titled party gets half the separation date value or half the present value of the home.
Regardless of which spouse holds title to the Matrimonial home, both have a right to equal possession of the Matrimonial Home unless a court orders exclusive possession to one or the other. This rule does not affect the right to share in the value of the Matrimonial Home.
If you would like to learn more about the way the law treats a Matrimonial home, please contact us for more information.