Repeatedly, in initial interviews and even in discussions with friends and other lawyers, I hear interpretations of family law that may be considered “urban myths”, using cultural parlance. This blog deals with the top three in regard to married parties and the matrimonial home.
Myth – The matrimonial home is deemed to be jointly owned even if only one spouse owns the property.
True or False? – False
The Family Law Act is a provincial statute that governs property division in Ontario. In 1986 this current statute replaced the previous Family Law Reform Act (FLRA). In the FLRA , all assets were deemed to be “family assets” regardless of ownership and, subject to certain restrictions, equally divided between spouses, regardless as to which spouse had title. In 1986, a fundamental philosophical change in the division of property occurred with the institution of the current Family Law Act (FLA). As a result, legal title was recognized for property division purposes. However, in order to avoid mischief the legislators included certain provisions regarding the matrimonial home to protect the rights of a non titled owner/spouse. The matrimonial home is defined as “ 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 spouse as their family residence is their matrimonial home” While legal title remains with the titled party , Part 11 of the Statute provides the non-titled party with certain rights including:
*the right to possession of the home;
*disallowing the titled spouse to encumber (for example, borrow against or mortgage or dispose) of the matrimonial home. If the titled spouse attempts to do so the transaction can be set aside by the court, and
*the right to “exclusive” possession of the matrimonial home, even if the requesting party is not a titled spouse.
So, how does this affect the myth? The ownership of the matrimonial home is relevant to the division of property. For example, if it is owned by one party the then it is valued at the date of separation and accounted for by the owner in his or her “column” of the value of his or her net family property. but the non-titled spouse still has the right to live in the home by agreement (possession) or court order (exclusive possession).
The answer to the myth is therefore, no. The matrimonial home is not deemed to be jointly owned. An owner accounts for the full value of the home for property division purposes, but each party has an equal right to reside in the home.
In dividing property on separation there are certain “deductions” from the value of your property such as debts and property owned on the date of marriage.
Myth – One can never deduct the value of a matrimonial home from their net family property
True or False? False
If one owns the same home at the time of separation as he or she did on the date of marriage, the Family Law Act does not allow the deduction. But a matrimonial home as defined by the statute speaks to the occupation of the home at the time of separation. If another home was owned on the date of marriage, and was subsequently sold, the value of the date of marriage property may be deducted as it is not the same property as the home ordinarily occupied on the date of separation. Of course if the home on marriage was owned jointly at the date of marriage (and is different from the one occupied at separation) then each party will be able to each deduct the same value and there will no benefit to either of them (unless the deduction places one party in a negative net family property value, but that is another issue).
The answer to this myth is no – there are times when a party can benefit from a home owned on marriage.
There can only be one matrimonial home.
True or False? False
The matrimonial home definition states that “every” property owned on the valuation date is a matrimonial home. The very definition clearly indicates that, yes, there can be more than one matrimonial home, such as a cottage, chalet or condo. This issue is especially relevant when the second home (for example a historic family cottage) has been gifted or inherited by one party. If the property is a matrimonial home and ordinarily occupied by the parties at the time of separation then the gifted and inherited property owned by a spouse cannot be excluded. Usually inheritances and certain proven gifts can be excluded or “taken out” of the property division calculation, but if the property is a matrimonial home it cannot be excluded. Imagine the surprise of a separated party has when he has been given the family cottage and now has to include the value in the property division process! As a result it is proper to ensure that when such decisions are made within the family, legal advice is obtained for the giving party, the receiving party and the non-titled spouse.
The Answer to this myth is yes – there can be more than one matrimonial home.
In subsequent blogs I will continue to discuss myths including common misunderstandings of the division of property, child support and forms of custody