At the time of separation and/or divorce between married spouses, amongst the most significant and pressing concerns is the division of matrimonial property. The foremost of these concerns is perhaps, the most important asset owned by many Canadians, the family home. Other concern may be the splitting of any other matrimonial assets, the Canada and/or Quebec Pension Plan credits, and finally, any liabilities incurred, such as joint debts. A divorce in Canada, depending upon the territory, has implication as to the property, its ownership, and more often than not gives rise to a division thereof according to law.
At the end of a marriage, the law factors and acknowledges the equal contribution of each spouse and provides that the value of any property acquired by them during the marriage (which still exists at the date of separation) must be divided equally. Any increase in this property during the period of the marriage must also be shared. This is known as the equalization of net family property. The law does however provide for some property to be excluded as well, such as gifts or inheritance received from someone other than a spouse, provided that the gift or inheritance has not been used towards the matrimonial home.
Matrimonial home in light of S.18, Ontario Family Law Act:
In Ontario, S.18(1) of the Ontario Family law Act defines the matrimonial home to include “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.”
In order to answer this question, the wording of the act must be kept in mind. A matrimonial home thus includes ‘every property’ may it be your holiday cottage, or a secondary property, as long as it is one where ordinary residence has been taken up at any point by the spouses in the marriage, may be designated as a matrimonial home under the law or in divorce proceedings. Also, where a home is owned by one of the spouses prior to marriage, is taken up as the ordinary residence by both spouses after marriage, the home will be treated as a matrimonial home.
It is also important to note that a property may also lose its designation as a matrimonial home, if a secondary property once taken up as an ordinary residence, is then placed on rent for income purposes and residence has seized, that property is no longer considered as a matrimonial home under the law.
How is the Matrimonial Home Treated in Property Division?
The answer to this can be better discerned by first understanding how matrimonial property division is treated under the law. Generally, each party to a divorce first determines their respective ‘net family property’ owned by them on the date of separation, excluding any gifts or inheritance (i.e., kept separate from the matrimonial home or property). Net family property is determined by taking the total assets on the date of separation, subtracting the pre-marital assets less the debts that was present on the day of their marriage (if applicable; with exception to the matrimonial home), and further subtracting any debts present at the end of their relationship, the amount which remains is the ‘net family property. After determining each partner’s net family property, the spouse with the higher net family property is required to pay half the difference between their respective net family property. This is known as the equalization of net family property payment.
In the case of the matrimonial home, the pre-marital value cannot be subtracted. Thus, for instance a house bought pre marriage for $600,000 may rise in value to $900,000 during the course of the marriage, in such a case the $600,000 cost of the house may not be subtracted from the property, and the full $900,000 is factored into the net family property. Also, any excluded property, such as gifts or inheritance money, used towards the matrimonial home lose their protection as well. Therefore, if gifts and inheritance are used on the matrimonial home they will be treated as part of the net family property accordingly.
Another circumstance where inheritance may lose the protection of excluded property is when a house is inherited and used as the family home for parties after marriage. Such property, which otherwise would be exempt as excluded-inherited property, loses any protection when taken up as a place of ordinary residence by the family, and thus it will be counted for the equalization purpose
Possession of the matrimonial home;
Generally, in the division of marital or matrimonial property, the parties do not necessarily own the property itself, but rather have a claim upon the increase in value of it. Further, the parties may own something and not be in possession of it such as property leased out or put on rent for income purposes.
Nevertheless, in the case of the matrimonial home, spouses have an equal right to the possession of the matrimonial home. The implications of this under the law are that a unilateral eviction of one spouse by the other cannot occur even if the ownership of the matrimonial home rests with one party or the other. However, either one of the spouses may approach the Courts in order to obtain exclusive possession of the property for a period of time the court orders. Factors relied upon by the court in determining an exclusive possession application are:
- The best interest of the child(ren) (if any)
- Financial position of both parties
- Any written agreed upon arrangements of both parties
- Any domestic violence or abuse by one party or the other
- Availability of alternative suitable and affordable accommodation to one party or the other
Even if an exclusive occupation order is obtained to occupy the matrimonial home, it is nevertheless significant to note that the party in whose favor the order is made may be required to pay occupation rent to the other party. The breach of occupation order is contempt of court, and the law imposes fines for breach of the occupation order, or even imprisonment for repeated breach of the exclusive possession order; it is therefore recommended that the order be complied with. “Ayaz Mehdi Professional Corporation” is a full-service firm that has experienced Family Lawyers to help you navigate through such matters.
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