Tag: Divorce Law

Family lawyer John Schuman was recently asked this question:

I bought my home in 1995 and it became the matrimonial home when i married my husband in 2009. I’m filing for divorce now and selling the house. Is the money from the sale of the house split 50/50 or will I receive a bit more being the original owner of the house? My husband is on the mortgage as well.

Answer by John Schuman:

When married couples separate in Ontario, the home (or homes – there can be more than one) that they live in on the day they separate gets special treatment in property  “equalization” process. (Non-married or common-law couples may not divide property or may do it differently.) Those special rules may make it seem that matrimonial homes are divided “50/50”, but that is not actually how it works.

The property division provisions of Ontario’s Family Law Act do not give married people any right of ownership over their spouses’ property or other assets.  If title to the matrimonial home is in your name, it stays in your name, subject to some claims your spouse can make if he or she makes significant contributions to that property.  Just being married does not mean spouses both own their home (or homes).   Watch this video for more details on how Ontario Law divides the value of property, not the property itself, on separation.

There are a number of special rights that attach to matrimonial homes (or homes).  One is that neither spouse can kick the other out of matrimonial home, or secure debt against a matrimonial home, without the other spouse’s consent or a court order.

The reason people think they share the equity in matrimonial homes 50/50 is that, absent a marriage contract, the entire equity in a matrimonial home is always included in the value of assets that married spouses share.  With almost every other type of asset, spouses only share in the growth in the value during the marriage.  However, section 5(2) of the Family Law Act does not allow a spouse to get any credit for bringing a property into the marriage if that property was a matrimonial home on the date of separation.  So, without a marriage contract, spouses share whatever value is in their matrimonial homes.

Spouses do not necessarily have to give their spouses “half the house” on separation. That spouse is entitled to stay in the house, and to have the equity included in property division, but, if a home is not jointly owned, there is not right to “half of it.”  It is just included in the assets to be divided.  So, if the spouse who does not own the matrimonial home has lots of savings or a pension to include in his or her assets to be divided, that may offset the value in the matrimonial home.  If the spouse who owns the matrimonial home had a lot of assets (other than the matrimonial home) on the date of marriage, his or her increases in net worth may be less than the other spouse, which would mean the home would not be divided.  The same may be also be try if the spouse who owns the matrimonial home has a lot of debt on separation may not have the increase in net worth that is necessary to owe the other spouse anything.

But, in short term marriages, there is a real danger that a spouse can walk away being entitled to half the other spouse’s home.  If the marriage was short, the couple may still live in the same house that one spouse brought into the marriage.  In that case, the spouse with the house has to share half the value of the house because there were almost no changes in each spouse’s financial situation and so nothing to offset the value in the matrimonial home when the spouses “Net Family Properties” are “equalized.”  Watch this video or listen to this podcast, for more on the dangers posed by the law of matrimonial homes.

Note that that the special rights for matrimonial homes only apply between two spouses.  Those rights regarding matrimonial homes do not apply to third parties, such as in-laws, landlords, business partners, or friends.   A spouse has no right under Family Law to stay in a home owned by his or her in-laws or another landlord.  You certainly do not become entitled to “half” of a matrimonial home that neither spouse owns.   People who think they should have rights with respect to a property that is not owned by them or their spouse should speak to a lawyer to see if any other type of law might help.

Before or after a marriage, spouses should never assume that the matrimonial home will just be divided 50/50 until they have each spoken to a lawyer to figure out how Ontario Family Law will work in their family’s situation.  This is an area where making a mistake can cost hundreds of thousands of dollars.  There may be things a lawyer can do to make things fairer – especially before a separation.  But even after separation, there may be possibility of making the tricky legal arguments to adjust how property is divided either pursuant to section5(6) of the Family Law Act or the Principles of Equity.

Obviously, there can be a lot of money involved in any marriage or relationship and that means there can be a lot at stake financially.   Get the help of a lawyer immediately to avoid financial hardship.

You can get a lot more information about Ontario Family Law issues, including property division, support, and most other common family law issues by downloading this $9.99 e-book for Kindle, Kobo, or iPad/iPhone/Mac or ordering the paperback version.  But, to keep out of trouble, it is always best to speak with a top family law lawyer.