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Exclusive Possession of the Matrimonial Home

One of the more difficult choices to make when separating is deciding who will get to live in the matrimonial home, or what is otherwise known as exclusive possession.  Both parties have likely developed an attachment to the home, and uprooting your life to move somewhere else can be a daunting and stressful experience.

So what exactly is exclusive possession? Does this mean a spouse now has ownership, legally known as title, of the home?

No.

This is a common misconception regarding what exclusive possession actually is.  Exclusive possession is the right of a spouse to possession of the home.  In other words, the ability of a spouse to live in the home, while the other spouse has to live somewhere else.  This right of possession is as against the spouse and not the home itself.  This WILL NOT give you title or ownership of the home by itself.

It is important to note that Married spouses have a stronger claim than Common law spouses regarding exclusive possession of the home as a result of the provisions in the Family Law Act (“FLA”).  The relevant provisions are replicated below:

 

19.(1) Both spouses have an equal right to possession of a matrimonial home.

(2)  When only one of the spouses has an interest in a matrimonial home, the other spouse’s right of possession,

(a) is personal as against the first spouse; and

(b) ends when they cease to be spouses, unless a separation agreement or court order provides otherwise.

 

24.(1) Regardless of the ownership of a matrimonial home and its contents, and despite section 19 (spouse’s right of possession), the court may on application, by order,

(b) direct that one spouse be given exclusive possession of the matrimonial home or part of it for the period that the court directs and release other property that is a matrimonial home from the application of this Part;

(2)  The court may, on motion, make a temporary or interim order under clause (1)(a), (b).

 

The court will of course have some considerations they will need to weigh when making the order for exclusive possession as per s. 24(1)(3) of the FLA:

(3)  In determining whether to make an order for exclusive possession, the court shall consider,

(a) the best interests of the children affected;

(b) any existing orders under Part I (Family Property) and any existing support orders;

(c) the financial position of both spouses;

(d) any written agreement between the parties;

(e) the availability of other suitable and affordable accommodation; and

(f) any violence committed by a spouse against the other spouse or the children.

 

(4) In determining the best interests of a child, the court shall consider,

(a) the possible disruptive effects on the child of a move to other accommodation; and

(b) the child’s views and preferences, if they can be reasonably ascertained.

 

What kind of spouses are entitled to exclusive possession?

The FLA is clear that if a person is looking for an Order in Family Court for exclusive possession, they must fall within the meaning of spouse in s. 1(1) of the Family Law Act.  Basically, you need to be married. See our post on Common Law vs. Marriage for more details.

This also means that you have to currently be a spouse of the other party to claim this remedy.  Divorced parties are not entitled to this remedy as they are no longer a spouse, but a former spouse.  So if you are separated, you can claim this remedy, but if you have a divorce certificate and you are legally divorced, you cannot claim this remedy. See our blog regarding Separation and Divorce for more info.

Common Law Spouses are similarly limited in their ability to utilize this remedy as they do not fall under the meaning of spouse in s. 1(1) of the FLA as described above.  However, this does not mean common law spouses cannot claim exclusive possession at all.  Common law spouses may be able to rely on the following:

  1. The common law spouse may have a trust claim towards the property that could result in an injunction, effectively allowing the spouse to remain in the home until the issue is resolved.[1]
  2. Under s. 34(1)(d) of the FLA, possession of the home could act as a form of support payment.
  3. Under a restraining order under s. 46(1) of the FLA or s. 35(1) of the Children’s law Reform Act. In which case, the possession of the home would be an effect of the Order, rather that the purpose of the Order.[2]

 

Proving the need for exclusive possession

Under these provisions, the person claiming exclusive possession needs to show that the evidence weighs heavily in their favour for the granting of the Order.[3] In Chrobok v. Chrobok, 2006 CanLII 27308, [2006] O.J. No. 3243 (S.C.J.), the wife claimed that she needed to remain in the home as it would be too traumatic for her children to move, and they were undergoing counselling at the time.  Ultimately, the wife failed to prove her argument for exclusive possession as she did not provide any supporting evidence from her children’s counsellor to support her position.

 

Occupation Rent

As a warning, if you are actually granted exclusive possession, you may then have to pay rent towards your former spouse who had to move out of the home!  Check back for future blog posts where I will discuss how this legal remedy works.

Information provided is for legal information purposes only and is not to be construed as legal advice.

[1] Perks v. Lazaris, 2016 ONSC 1356

[2] Perks v. Lazaris, 2016 ONSC 1356, para 27.

[3] Berdun v. Berdun, 2008 CanLII 23945, [2008] O.J. No. 2016 (S.C.J.); McEachern v. McEachern, [1994] O.J. No. 1544 (Gen.Div .); Tweed v. Tweed, [1990] O.J. No. 1440 (H.C.).

Net Family Property and Equalization: An Introduction

Equalization is a payment from one spouse to the other at the end of a marriage.  This equalization payment ONLY applies to married spouses, not to common law spouses.  S. 5(1) of the Family Law Act (“FLA“) provides for Equalization when:

  1. A divorce is granted;
  2. Marriage is declared a nullity;
  3. When (married) spouses are separated and there is no reasonable prospect they will resume cohabitation.

One thing I often hear clients ask is whether they have to split 50% of everything.  While somewhat true, it is not entirely accurate.  The real definition of division according to s. 5(1) of the FLA is as follows: “the spouse whose net family property is the lesser of the two net family properties is entitled to a one-half difference between them”.

In simpler terms, separated spouses are entitled to 50% of the value of the marriage.  So how is that value determined?

 

Marriage and Valuation Date

First we need to understand what Net Family Property (“NFP”) is and how to calculate it.  S. 4(1) of the Family Law Act defines NFP as all property that a spouse owns on the valuation date (i.e. separation date) after deducting:

  1. Debts and other liabilities; and
  2. Value of property OTHER THAN A MATRIMONIAL HOME owned on date of marriage.

Therefore we have two dates that are important in determining equalization:

  1. The valuation date; and
  2. The date of marriage.

The date of marriage is simply the date you got married and does not include any cohabitation before marriage.  Spousal support may factor in cohabitation periods before marriage however.  See our post on spousal support for more info by clicking here.

The Valuation date is essentially the date the marriage ended, or the date the parties separated.  It is defined under s. 4(1) of the FLA as:

  1. The date you separate;
  2. Date the divorce is granted;
  3. Date marriage is a nullity;
  4. Date one of the spouses commences an application based on improvident depletion that is subsequently granted; or
  5. Date before the date on which one of the spouses dies leaving the other spouse surviving.

Once we have those two dates, we can begin figuring out how much your Net Family Property (“NFP”) is.

 

Calculating Net Family Property for Equalization

When determining the Net Family Property (“NFP”) of persons who are ending their marriage, we need to look at two important dates: the marriage date and the valuation date.

Let’s pick two dates to help figure out the NFP:

  1. Jane and John married on October 1, 2010;
  2. Separated on February 1, 2018.

That’s almost 8 years of marriage.  You’ll see here that February 1, 2018 is the date of separation, which fits under the definition of Valuation date in s. 4(1) of the FLA.

Now, we take the value of all assets that both parties own on the valuation date, subtract their debts owned at valuation, and finally subtract the value of any property owned on the marriage date.

JOHN

John’s Assets on Valuation Date Car – $25,000

Personal Bank Account – $3,000

$4,000 in Joint account with Jane (50%) – $2,000

Investment Account ending in 1010 – $170,000

 Total = $200,000

John’s Debts on Valuation Date Loan from Friend – $50,000

Total = $50,000

Property Owned at Marriage Investment Account ending in 1010 – $100,000

Total = $100,000

Calculate Final Total

Assets

– Debts

– Property at marriage

 

$200,000

-$50,000

-$100,000

John’s NFP $50,000 

JANE

Jane’s Assets on Valuation Date Car – $20,000

Personal Bank Account – $2,000

$4,000 in Joint account with John (50%) – $2,000

RRSP – $6,000

Matrimonial Home – $320,000

Total = $350,000

Jane’s Debts on Valuation Date Line of Credit – $50,000

Mortgage – $100,000

Total = $150,000

Property Owned at Marriage Matrimonial Home – $220,000

Total = $220,000

Calculate final total:

Assets

– Debts

– Property at marriage

 

$350,000

-$150,000

can’t subtract Mat Home

Jane’s NFP $200,000 

So, something interesting happened here.  Jane’s name is the only one on title to the home and it was valued at $220,000 when they got married.  She should be able to deduct that home from the valuation date value right?

Wrong.

Remember, you subtract property owned at the date of marriage from your valuation date EXCEPT for the matrimonial home.  So Jane has to include the entire value of the home regardless of how much it was worth at marriage.

We’re almost there.  The language of the equalization rule is: “the spouse whose net family property is the lesser of the two net family properties is entitled to a one-half difference between them.”

 

EQUALIZATION

Jane’s NFP

– John’s NFP

$200,000

-$50,000

$150,000
Difference divided by 2 $150,000/2
Equalization Payment or, the one half difference $75,000

In this instance John, who is the lesser of the two net family properties, is entitled to the one half difference between them, $75,000.

Therefore Jane makes an equalization payment of $75,000 to John.  With that, John would have $125,000 and Jane would have $125,000.  They are equalized.

 

Additional Exclusions

You also have the ability to exclude other property on the valuation date other than just debts under S. 4(2) of the Family Law Act.

These include things such as:

  • Property acquired by gift or inheritance after marriage date
  • Income from property that was gifted or inherited if donor EXPRESSLY stated it is to be excluded from NFP
  • Damages from a settlement resulting from personal injuries, nervous shock, mental distress, or loss of guidance care and companionship
  • Proceeds or right to proceeds of life insurance policy payable on death of insured
  • Property OTHER THAN MATRIMONIAL HOME into which property above can be traced
  • Property both spouses agree not to include as a result of a domestic contract (see our post on separation agreements for more info)
  • Unadjusted pensionable earnings under Canada Pension Plan

If you’re thinking of separating and want help to ensure you are properly protected, contact Rabideau Law to see how we may assist.

Separation and Divorce

Clients often contact our office inquiring whether we can assist with their divorce. In these cases, one of the first questions I always ask is how long they have been separated for.  If they tell me they’ve only been separated for a few months I inform them that they can’t get divorced unless one of the following things occurs:

The Divorce Act (“DA”) requires that there be a “breakdown of the marriage” under s. 8(2).

This means that:

  1. You live separate and apart for one year;
  2. The other spouse has committed adultery; or
  3. One spouse has treated the other with physical or mental cruelty.

If you meet one of the criteria above then you can get a divorce. If you are separated, you can start an application for divorce at any time, but the court will not grant you the divorce until you have been separated for one full year.  The DA even has a section on how to determine that period of separation under s. 8(3) The basic requirements are that the spouses have an intention to separate and that they do not try to reconcile their relationship for more than 90 days.

Keep in mind that divorce only applies to married spouses; if you are common law then you only need to be separated in order to effectively terminate the relationship. See our previous blog post covering the difference between common law and married spouses.

Even if you start the divorce application, the divorce does not actually take effect until 31 days after a Judge provides a judgment granting the Divorce (see s. 12(1) of the DA).  Furthermore, s. 11(1)(b) of the DA states that a divorce will not be granted until the court is satisfied that reasonable arrangements have been made to support the children of the marriage.

A divorce or annulment is the only way to end a marriage.

You won’t NEED any formal documentation to show that you are separated, however it is HIGHLY recommended that you get a separation agreement drafted to protect your interests. http://www.rabideaulaw.ca/separation-agreements-an-overview/

Adultery and Abuse

The “separated for a year” rule does not apply if there is a breakdown of the marriage resulting from adultery or abuse. If a person is relying on adultery or abuse as a reason for the breakdown of marriage, s. 11(1) of the DA makes it clear that there can be no collusion, condonation, or connivance on the part of the spouse bringing the application.

This means that the spouse bringing the application for divorce cannot accept the behaviour or conspire to orchestrate the adultery or abuse. Also, the spouse committing the adultery cannot use it as a reason for the breakdown of the marriage.  However, the court will grant the divorce if it is their opinion that the public interest would be better served by granting the divorce.

The DA also provides a definition for collusion.  Here, collusion means an action taken directly or indirectly by a spouse applying for divorce to subvert the administration of justice.  This includes an agreement or conspiracy to fabricate, or suppress evidence to deceive the court (see s. 11(4) of the DA).

The Separation – Living Separate and Apart

In order to be separated, courts need to see that you are living “separate and apart”.

But what does this mean exactly?

There are a few factors that courts will consider regarding whether or not two persons are actually separated. Simply saying you’re separated may not be enough.

Factors courts will consider to determine if you are separated include the following (see paragraphs 37-47 of T.R. v A. K, 2015 ONSC 6272)

  • Is there a physical separation, (Note that this doesn’t have to mean spouses live in separate houses)
  • An intent of ending the marriage/relationship
  • Absence of sexual relations
  • Level of communication between the spouses
  • Are there joint social activities
  • Meal patterns
  • What chores are being performed between them
  • How do others view their relationship

Keep in mind that this is not an exhaustive list as courts can consider other factors.  Also, you don’t need to meet all of these factors in order to be considered separated.  What needs to occur is that courts see a physical separation and that you both are seeking to pull out of the marriage (or common law relationship). What is important is the INTENTION to separate.

Does the date of separation matter?

The actual separation date or valuation date as defined in s. 4(1) of the Family Law Act is an essential part of the separation process.  The valuation date is the date from which all values related to property and support are calculated from.  As an example, a valuation date in the winter versus one in the spring or summer could affect the value of the matrimonial home and how much is to be distributed between the parties.  This is why it is crucial to seek out a family lawyer to advise you of your rights and responsibilities to ensure that you and your family are properly protected.

Keep an eye out for future blog posts discussing issues related to property.