How To Deal With The Matrimonial Home While Getting Divorce in Ontario

Ontario divorce laws have clear guidelines on how to divide property and assets in a divorce. Considering two in five marriages in Canada end in divorce, the issue of the matrimonial home comes up often and is one of the more common topics where disputes can arise.

If you are getting divorced in Ontario and sharing a property with your spouse, here is what you can expect. You will also find out when it is necessary to contact a divorce lawyer in Toronto and how they can help.

What Is A Matrimonial Home?

‘Matrimonial home’, as defined under the Ontario Family Law Act, as any residence or property that one or both spouses have interest in, or any home that is rented, owned or occupied by a spouse and their family on the day of separation. This can include condos, townhouses, cottages, and vacation homes as well.

Can You Have Multiple Matrimonial Homes?

Yes, some couples have multiple matrimonial homes. For example, a couple may have a home they use during the week in the city and also have a vacation cottage that they frequent on summer weekends. Any additional homes or properties that you and your spouse own, but are not occupied regularly by either of you, may not constitute a matrimonial home.

How Do You Split A Matrimonial Home in Ontario?

The question of, “Who gets the house in a divorce in Ontario?” does not have a simple answer. Both spouses have rights as it concerns the matrimonial home. This type of property is viewed differently under the Family Law Act in Ontario, compared with other property and assets. In a divorce, both spouses have equal rights to continue living in the matrimonial home up until the home is sold, or the parties consent or a judge grants a court order that orders one of the spouses to move out.

To this latter point, it is illegal for a spouse to change the locks or forcefully remove the other spouse. The only way for one spouse to be declared the exclusive owner of one’s matrimonial home is through a family court trial or agreement. A court trial such as this can overrule who has the legal title for the home. Ideally, if you can avoid going to court, it’s better for all parties involved and with that, the need for a formal separation agreement is established.

What About A House Owned Before Marriage?

A matrimonial home owned before marriage is marital property in Ontario. It does not matter who officially owns the title to the home. If you lived there together while married and on the date of separation, the property is considered a matrimonial home. If you previously bought and owned the property before you met your spouse, it does not matter. You lived there together on the date of separation and therefore, it is a  matrimonial home. Homes that were gifted to you or assigned as inheritance, if you lived there with your married partner, it will always still be considered the matrimonial home.

How Do You Divide Property In A Divorce?

When getting divorced in Ontario, the property is shared according to an equalization formula between spouses. For a matrimonial home, understandably, this creates an issue. You can’t break apart a property, providing a portion to each. The solution to this problem is that the spouse who wants to keep the matrimonial home pays the other spouse half its value to ensure that they leave the marriage on the same equal footing as you. This requirement is why most couples divorcing often end up selling the matrimonial home.

To simplify and have more control over the details of whether one of you will keep the home, there are a few options.

  • One spouse keeps the matrimonial home and buys the other spouse out. The spouse keeping the matrimonial home pays the other spouse half of the equity, taking full possession of the home, mortgage, applicable taxes, and all debts tied to it.
  • You and your spouse decide to sell the home to a third party and split the proceeds of the sale.
  • You and your spouse decide to rent the home to a third party and split the revenue.
  • It is agreed that one spouse stays in the home for a specific interval of time, such as allowing a child to graduate high school. If you are on good terms with your spouse and have children, a situation such as this can work.
  • If you leave it to a judge to decide who will keep the family home, for the most part, the Court will simply order the sale of the home. The Court generally does not make Orders permitting one spouse to buy the other out.

What Is An Order Of Exclusive Possession On A Matrimonial Home?

In some cases, a temporary order of exclusive possession is granted. An order of exclusive possession outlines which spouse is allowed to live in the matrimonial home and will force the other spouse to live elsewhere. This is often asked for in a variety of situations, i.e where there is domestic violence present. Even in this situation, however, the other spouse may still have the right to periodically re-enter so long as they give sufficient advanced notice. It also is worth clarifying that when such as order is granted, it only permits a spouse the exclusive right to live in the matrimonial home without the other spouse. It does not permit them to sell or dispose of furniture, belongings, and other assets in the home. These assets are all subject to terms in the divorce agreement and are not provided in such an order alongside the matrimonial home.

Furthermore, until it is written in a separation agreement who receives the matrimonial home, neither spouse is allowed to sublet, rent, sell, refinance, mortgage, or place a line of credit on it without the other spouse’s written permission.

What Are My Rights If I Move Out Of The Matrimonial Home During Divorce?

During a divorce, it’s sometimes easier for one of the two spouses to move out and give some space, particularly when there are children involved. Rest assured that if you move out of your matrimonial home, you aren’t forfeiting your ownership rights. However, what will change is you aren’t entitled to re-enter the matrimonial home whenever you please. Reasonable and adequate notice must be given to the other spouse living in the matrimonial home.  Leaving the matrimonial home can also affect your parenting rights.  It is important you consult with a divorce lawyer in Toronto before you move out.  There are ways to create without prejudice agreements so the couple does not have to live under the same roof while negotiating the terms of their separation.

Can You Contract Out Of Selling A Matrimonial Home in Ontario?

A separation agreement can stipulate which spouse is granted exclusive possession of the matrimonial home.

If there is disagreement on how to split the matrimonial home, you have two years from the date of your divorce or six years from the date of separation to go to court and have the courts decide how to divide property and assets, including the matrimonial home.

Defining ‘Marriage’ And Matrimonial Home in Common-Law Relationships

A matrimonial home applies to a couple with a legally recognized marriage. Couples who live together as spouses in Ontario for a minimum of three years but who are not legally married are considered common-law. These couples may have children together and might even refer to each other as ‘husband’ and ‘wife’ but if you’re in a common-law relationship, this isn’t legally married.  Common-law couples cannot have a matrimonial home.

As it relates to spousal support, child support, child custody, and child access, common-law relationships are treated as if it were a legal marriage. As it relates to property and the matrimonial home, it is not the same.  Equalization doesn’t apply. A home shared in a marriage is shared equally in value and divided accordingly in a divorce. In a common-law separation, however, each spouse in general, keeps the assets and property they brought with them into the relationship, in addition to anything they bought during the relationship. The only time property, assets, or what would be the ‘family home’ are divided is when both spouses are listed as owners.  There can also be a trust claim advanced by one common-law spouse against the other for an interest in the property regardless of who is on title and who owns the home.

What About A Post-Separation Increase in Value of Matrimonial Home?

With the hot housing marketing in the Toronto area, homes can increase in value by upwards of 13% or more per year.  The issue that often arises is how do separating spouses deal with the increase in the value of the home?  Is it shared?  Is the person doing the buyout entitled to keep any increase in value?  What if only one spouse is on title?  The amount at stake can be significant.

When both spouses are on title, the usual result is that they share the increase in value.    The home will either be sold at the market value or the spouse will purchase it out at fair market value.    This is why it is important if you are planning to buy out your spouse that you work diligently towards a settlement and you don’t delay.  The delay can cost you a significant amount in this housing market.  Where one spouse leaves the home and stops paying all the bills leaving the other to pay the expenses it would be unfair for the spouse who left the home to share in the increase value when they essentially stopped treating the home as his or hers.    The Court may not allow that spouse to share in the current value of the home.

If you have any doubts about how to deal with a matrimonial home, a divorce lawyer with experience can provide you with the support and guidance to arrive at a reasonable settlement which is incorporated into a separation agreement. Whether you are working amicably with your spouse to dissolve the marriage or are not on speaking terms, the rules on how to deal with the matrimonial home are the same. However, you can have some flexibility if you and your spouse agree on how you want to divide the value of matrimonial home, if you keep your case out of Court.   A divorce lawyer can help navigate these emotional and contentious situations, with solutions-oriented strategies and a pathway to resolving matrimonial home disagreements on the best possible terms.

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