The matrimonial home is often the single largest assets owned by separating spouses. The Family Law Act (F.L.A.) recognizes and affords special protection to the matrimonial home and addressing both property and possessory entitlements. The legislation does not apply to common law spouses.
The ownership definition as set out in the F.L.A. is very broad in that it includes every property that a person has an interest in at the time of separation.
The F.L.A. net family property equalization excludes from the equalization those properties each of the spouses owned at the date of marriage.
The exception to the pre marriage property exclusion is the matrimonial home. Although there is provision under the legislation for an unequal division of the equity in the matrimonial home in relationships of less than five years, a spouse who brings a home into the marriage runs the risk of losing the accumulated equity in the home if the couple reside in the home at date of separation.
One of the key factors in the definition of the matrimonial home is that the home must be occupied by both spouses at the date of separation. In the event that one spouse brings a home into the marriage and that home is sold, and the proceeds used to purchase a replacement matrimonial home, the first home loses the matrimonial home label and the spouse owning the home is able to deduct the value of the home at date of marriage.
Couples can own more than one matrimonial home if the two residences (i.e.: home and cottage) were occupied at date of separation with sufficient frequency.
A couple may, as well, register a designation on title which identifies one particular residence as being the matrimonial home.
The matrimonial home is given further protection when, during marriage, spouses use excluded properties (i.e.: inheritances and gifts from third parties) to pay down the mortgage on the matrimonial home. In those circumstances, the excluded assets lose their excluded status.
The F.L.A. also provides that spouses have a right to possess or reside in the matrimonial home whether the spouses have legal registered ownership in the matrimonial home or not. This right of residence cannot be bargained away by agreement.
In order to preserve the equity in the matrimonial home, The Family Law Act requires that any mortgaging of the matrimonial home require the written consent of both spouses, even if one of the spouses is not a registered owner of the matrimonial home.
In most circumstances, the matrimonial home is owned jointly between the spouses, either as tenants in common or joint tenants. There is no statutory authority for a Judge under the F.L.A. to order one of the registered co-owning spouses to convey his or her interest in the matrimonial home to the other spouse. Under the Partition Act, in the event that spouses cannot agree to settle each other’s respective interests in the matrimonial home, the matrimonial home must be sold in order to determine the spouses’ respective interests.
In circumstances where parties are getting married and one spouse owns a home where the couple plans to reside during the marriage, it is strongly recommended that the parties execute an agreement that protects at least the equity in the said home as it existed at the date of marriage.