February 27, 2019 | Homeownership
Marriage is a beautiful thing, but it can also be complicated—especially when spouses decide to separate. If you and your former loved one are planning to get divorced, you’ll likely encounter challenges regarding the division of property. Some of the biggest may relate to the matrimonial home.
If you don’t understand how the matrimonial home is defined, you’re not alone. That said, this important family law concept has the potential to impact how your home will be divided, who will be entitled to use it during your separation, and who will profit from its sale.
If you’re going through the separation process, here’s what you need to know about matrimonial home rights in Ontario…
What is the matrimonial home?
Let’s start with the official definition, which is set out in the Ontario Family Law Act. According to the act, “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.” In simpler terms, it’s the place where you and your spouse lived up until you decided to part ways.
The definition is relatively clear, but there are a few things to keep in mind. First off, you can have more than one matrimonial home. It’s not just the house or condo where you spent most of your time together that receives special protections. If you own a cottage, ski chalet, vacation home, or other property that meets the definition above, it too qualifies. It’s also important to know that just because a property is a matrimonial home at one point in time doesn’t mean it always will be. For example, if you vacate of one of your properties and start renting it out for an extended period of time prior to your separation, you’re changing its primary use. As a result, it will no longer meet the definition of a matrimonial home.
How its divided
To understand how the matrimonial home is divided, you must first comprehend how marital assets are split in general. First off, the net family property of each party is added up. To find this amount, you would start by tallying up the value of your assets on the date of your separation, minus your debt (if you have any). Next, you would subtract the value of the property you had when you entered your marriage. In other words, the assets you accumulated before entering the marriage aren’t included. If (after completing this calculation) your net family property is higher than your spouse’s, you’re responsible for paying them half of the difference. While this is how property is usually divided, the matrimonial home is treated differently.
For one thing, the full value of your matrimonial home is included when your assets are divided. In other words, it doesn’t matter if you bought your home prior to getting married. Even if the property is worth more today than it was on the date of your marriage, its value on the date of separation is what’s used during the equalization process. Second, certain exemptions that apply to other types of property don’t apply to the matrimonial home. For example, gifts and inheritances are typically exempt from equalization payments. Not so with the matrimonial home. If you inherited the house that you shared with your spouse, it’s still divided upon separation.
Your matrimonial home rights in Ontario
It’s one of the most common questions regarding the matrimonial home. Who should occupy it during separation? Usually, both spouses have a legal right to possess the property. In some cases—such as those where domestic violence is a factor—an order of exclusive possession may be granted, enabling just one spouse to occupy the home.
It should also be noted that during the period when both spouses are entitled to possess the matrimonial home, it may technically be owned by just one person (the one who holds the title). That said, the title-holding spouse can’t sell or mortgage the property without explicit permission from their former partner. In some cases, two spouses can’t agree on what to do with their matrimonial home. The court may step in and order them to sell it and split the profits.
Of course, most people aren’t thinking about the potential division of property on their wedding day. That said, separations do occur. For this reason, it’s a good idea for both parties who are entering a marriage to speak to a lawyer about matrimonial home rights. In some cases, it may also be helpful to consider the protection afforded by a marriage contract.
Preparing for a major life transition? Whether you need help selling your matrimonial home or finding a new property, we can help. Get in touch—we’d look forward to hearing more about your needs!