Handling Complex Asset and Property Division Cases in the Mississauga Area
Every divorce is as unique as the couple involved. If you are going through a divorce, you need experienced legal guidance to help ensure that your rights are well protected. At Amiri Family Law in Mississauga, Ontario, we take a personalized approach to divorce, and we will work closely with you in order to obtain the division of matrimonial property to which you are entitled. Our experienced family and divorce lawyers are committed to listening to your concerns and to you feeling truly heard throughout the divorce process.
Understanding Property & Asset Division in Ontario
Property and asset division refers to the division of matrimonial property in a divorce. Matrimonial property means virtually every asset that the couple amasses in the course of their marriage – from the date of marriage to the date of separation. These assets also include any increases in value of property that either spouse brings into the marriage. Matrimonial property can include a wide variety of assets:
- Real estate, including the matrimonial home, vacation properties, and investment properties
- Stocks and bonds
- Registered retirement savings plans (RRSPs)
- Pension plans
These represent the basics, but because every couples’ financial portfolio is unique to their own circumstances, the list can go on and on.
For most married spouses, the matrimonial home is the most significant and valuable asset that must be dealt with when dividing their net family property during a divorce. Under Ontario’s Family Law Act, the matrimonial home is treated differently than every other asset in virtually every way. As a result, the disposition of the matrimonial home is also often the source of strong disagreement and conflict between divorcing spouses. For these reasons, it is very important that every divorcing spouse consults with a knowledgeable divorce lawyer to fully understand how the matrimonial home is treated during a divorce.
What is a Matrimonial Home?
According to section 18 of Ontario’s Family Law Act, “[e]very 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.” Importantly, this expansive definition means that various types of property, including a house, condominium, apartment, cottage, boat, or recreational vehicle may be found to be a matrimonial home.
The matrimonial home designation can be applied to a property that is owned or leased by one or both of the spouses. Therefore, even if one spouse is registered as the sole owner of a property on title or the sole lessor on a lease, the property can still be considered a matrimonial property and attract the various significant characteristics and protections that a matrimonial home provides to the spouse of the title- or lease-holder.
Moreover, more than one property can attract the matrimonial home designation at the same time. For example, either or both married spouses can own a house in Mississauga and a cottage in Muskoka, spend sufficient time at both properties such that they are both “ordinarily occupied,” and have both properties be deemed a matrimonial home upon divorce. However, under section 20 of the Family Law Act, both spouses can also designate a single property as the matrimonial home, thus ensuring that any other property that would otherwise qualify as a matrimonial home under section 18 of the Family Law Act does not attract that designation.
Finally, and critically for common law partners, a property will only be considered a matrimonial home if the parties involved are married. Common law partners, regardless of how the length or seriousness of their relationship do not benefit from the special protections afforded to a matrimonial home under the Family Law Act.
To qualify as a matrimonial home, at least one of the spouses must have an ownership interest in the house and it must have served as the family’s residence. A house, a condo, a vacation property, or even a combination of these dwellings can qualify as a matrimonial home if the family ordinarily used it as a family residence. Once a dwelling is established as matrimonial property (unless explicitly addressed in a domestic contract such as a prenuptial agreement) – even if one spouse brought the house into the marriage – the entire value of the home is factored into the couple’s matrimonial property and not just any increase in its value.
The Matrimonial Home and Division of Net Family Property
The term property and asset division is misleading because the property and assets can’t actually be divided in any practical sense. Instead, each spouse’s net worth is calculated for the date they officially separated, which is also known as the valuation date. If either divorcing spouse has personal property that has increased in value, this increase is referred to as the individual’s net family property (the property that is divvied up in the division of matrimonial property). Finally, the spouse with the greater net family property will make an equalizing payment to his or her spouse in the course of the divorce. The amount paid is typically 50 percent of the difference between both spouses’ individual net family properties.
Perhaps the most significant characteristic of a matrimonial home under the Family Law Act is that the entire value of the property (less any debt owing on it) is included in the title-holding spouse’s net family property that is equalized (divided) during divorce. In cases where both spouses own a matrimonial home as joint tenants (50/50 ownership), this treatment is rather non-controversial and expected. However, in cases where one spouse is the sole owner of the matrimonial home, it is often a source of significant anger and resentment from the title-holding spouse toward the non-title-holding spouse.
Unlike all other assets that are equalized during divorce, a spouse who owned the matrimonial home prior to marriage will not receive a credit for the value of the house on the date of marriage to reduce the value of their net family property that is to be divided. Thus, all equity that was accrued in the matrimonial home prior to marriage will also be equalized during a divorce. Moreover, even in cases where one spouse received a property that ultimately becomes the matrimonial home as a gift or inheritance, or used funds they received as a gift of inheritance to purchase a property that becomes the matrimonial home, they will not receive a corresponding credit or deduction applied to their net family property for any portion of the value of the gift or inheritance during a divorce.
It should be noted that this outcome can be avoided if the spouses signed a valid prenuptial agreement that specifically addressed how the matrimonial home will be treated during divorce. However, if no prenuptial agreement was entered into, there are few practical remedies to avoid equalizing the entire equity accrued in a matrimonial home for a spouse who owns the home.
What about Common-Law Spouses?
Things are a bit different for partners in common law marriages because they don’t have the automatic property rights that their married peers do. Nevertheless, spouses of common-law marriages can – under specific conditions – claim a constructive interest in the property to attempt to correct any unjust enrichment of their common-law partners. For instance, if one partner to a common-law marriage owns a home and the other partner significantly contributes to running and taking care of that home over many years while enabling the homeowner to succeed financially, the contributing partner may be entitled to a percentage of the home’s value.
Right to Possession of the Matrimonial Home
Both married spouses have an equal right to possession of a matrimonial home regardless of ownership of the property. This right begins immediately after the parties marry and cannot be contracted out of in a domestic contract (prenuptial agreement). It exists even if one spouse is the sole owner/lessor of the matrimonial home.
The right to possession of the matrimonial home does not create a property interest in the home if one does not already exist (for example, in cases where both spouses are listed on title as joint tenants or tenants in common or both spouses are listed on the lease); that is to say, the non-title- or lease-holding spouse does not obtain an ownership or leasehold stake in the property. Rather, they have a personal right against their spouse. This means that a spouse cannot forcibly remove their spouse from a matrimonial home, nor can they change the locks on the home. It also prevents a spouse from selling, mortgaging, subletting, or transferring a matrimonial home without the express consent of their spouse or a court order regardless of their property rights.
The right to possession of the matrimonial home only ends when the parties stop being spouses—i.e., they have divorced—or a separation agreement or court order terminates it.
Exclusive Possession of the Matrimonial Home
As noted above, a court order can terminate one spouse’s right to possession of the matrimonial home and award exclusive possession of the matrimonial home to the other spouse on a temporary or interim basis. Of course, awarding exclusive possession to one spouse is significant act and the court will not do so without good cause. Section 24(2) of the Family Law Act lists the following as factors to be considered by the court in an application for exclusive possession:
- The best interests of the children affected;
- Any existing orders under Part I (Family Property) and any existing support orders or other enforceable support obligations;
- The financial position of both parties;
- Any written agreement between the parties;
- The availability of other suitable and affordable accommodations; and
- any violence committed by a spouse against the other spouse or the children.
Moreover, in order to determine what is in the best interests of the children, the court will, pursuant to section 24(4) consider:
- The possible disruptive effects on the child of a move to other accommodations; and
- The child’s views and preferences, if they can reasonably be ascertained.
As the foregoing clearly demonstrates, the best interests of the children are a paramount consideration in an exclusive possession application. And, insofar as possible, the Family Law Act seeks to ensure that the children remain in their home among stable, comfortable, and familiar surroundings and, if necessary, one parent vacates the home and finds alternative accommodations until the parties’ family law matter has been resolved. Indeed, exclusive possession orders have been granted on the basis of ensuring the children are able to continue attending their regular school, in some cases for a period of a few years.
Importantly, when considering “any violence committed by a spouse” the court does not limit violence to physical harm and will consider acts of verbal and emotional abuse as well. Family courts have recognized that emotional abuse often creates an intolerably tense environment for the affected children and/or spouse and leaves them in a position that is equally as vulnerable as an individual that is suffering physical abuse. Thus, the court can and has granted exclusive possession of the matrimonial home on the basis of both physical and emotional abuse.
As with court orders of any kind, adherence to an order for exclusive possession of the matrimonial home mandatory, not optional. The Family Law Act provides that a person who does not comply with an order for exclusive possession can be fined up to a maximum of $5,000.00 or imprisoned for a maximum of 3 months, or both, on a first offence and fined up to a maximum of $10,000.00 or imprisoned for a maximum of 2 years, or both, on a second offence. Moreover, the Act also permits a police officer to arrest a spouse if the officer has reasonable and probable grounds to believe that the spouse is not complying with an order for exclusive possession.
Occupation Rent: Compensation for Lost Possession of the Matrimonial Home
In cases where one spouse has exclusive possession of the matrimonial home, the other, non-occupying spouse may seek an order for occupation rent (money) to compensate them for the occupying spouse’s exclusive possession (and the non-occupying spouse’s corresponding loss of possession). In determining whether to grant an order for occupation rent, the court will consider the following factors:
- The conduct of the non-occupying spouse;
- The conduct of the occupying spouse, including failure to pay support;
- Delay in making the claim;
- The extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;
- Whether the non-occupying spouse moved for the sale of the home and, if not, why not;
- Whether the occupying spouse paid the mortgage and other carrying charges of the home;
- Whether the children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;
- Whether the occupying spouse has increased the selling value of the property;
- Ouster is not required, as once was thought in some early decisions.
As these factors demonstrate, occupation rent is not automatically awarded in every case where one spouse enjoys exclusive possession of the matrimonial home and, in fact, an occupation rent claim requires a comprehensive review of the spouses’ particular circumstances in order to achieve a just outcome for both spouses. Critically, the last factor listed above establishes that occupation rent claims are not limited to cases where an order for exclusive possession of matrimonial home has been granted. Indeed, occupation rent is also a remedy available to a spouse that vacates the matrimonial home of their own volition.
In cases where a spouse succeeds in their application for occupation rent, the amount of money they typically obtain is one half of the rent the property would otherwise generate if it was leased, less applicable adjustments for expenses such as taxes, insurance, and the cost of improvements to the property.
Contact a Mississauga Property Division Lawyer for a Consultation
If you are considering a divorce and have concerns about the division of your property and assets, the dedicated legal team at Amiri Family Law is here to help. Our experienced divorce lawyers have the skill, knowledge, and compassion to help protect your rights and to explore your best options with you. We have offices that are conveniently located in Mississauga, Oakville, and Burlington, Ontario, and we’re available 24/7. For more information, please schedule a consultation by contacting or calling us at 647-792-2961 today.
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