“Matrimonial Home” Rules Apply to “Spouses” Only:
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.
No Marriage Date Deduction of Value:
Unlike other property, a spouse cannot deduct the Matrimonial Home’s value as of the marriage date from his/her net family property, even if that spouse brought it into the marriage.
Equalization of the Matrimonial Home’s Value:
If spouses jointly own the Matrimonial Home, then half of its value goes into each spouse’s net family property when calculating equalization.
When one spouse holds title to the Matrimonial home, but the other does not, then the value of the Matrimonial home falls into the net family property of the spouse on title. 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.
Unlike other assets which are valued on the date of Separation, the value of the Matrimonial home on the date that it is transferred or sold will generally determine the value for division of this asset.
Typically spouses are expected to equally contribute to any mortgage, insurance and property tax payments on a Matrimonial home. If one spouse has single handedly paid these expenses since separation, then that spouse can often obtain an “adjustment” to compensate him/herself for half of any such amounts paid. Other adjustments may also arise, depending on the particular circumstances of the spouses and the Matrimonial home. Since spouses share in the Matrimonial home’s value, they also have corresponding obligations to share in the associated expenses.
Sale or Buyout of the Matrimonial Home:
In either case, the parties might negotiate and agree to a mutually satisfactory “buyout” proposal where one spouse buys the other spouse’s interest for a negotiated amount. Neither party has the right to a buyout, but rather 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 Matrimonial home must be sold. A spouse’s rights and options depend on which spouse holds title to the Matrimonial home.
Joint versus Sole Ownership of the Matrimonial Home:
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, the court should order the partition and sale of the matrimonial home. Often the court will order the net sale proceeds “held back” pending further agreement or court order dealing with other legal issues between the parties. In determining whether to order the sale of a Matrimonial home, the court may also consider the impact of the proposal on any children or others who live in the home.
But 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, the application to the court will usually proceed as a motion to dispense with spousal consent to the sale of the Matrimonial home.
Conversely, the non-titled party cannot force the sale of the home without first getting the court to declare that he/she has an interest in the property. Even without such a declaration, the non-titled party will still receive half of the value of the property through the equalization process. Absent the declaration of an ownership interest for the non-titled party, the sale of the Matrimonial home will likely proceed only if the titled party does not have enough assets to make an equalization payment after the other property issues are determined.
Equal Right to Possess the Matrimonial 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.