It’s complicated

WHEN THE MATRIMONIAL HOME IS MORE THAN JUST A HOUSE.

Family Law

Most people would tell you that a “matrimonial home” is simply the house in which a couple lives.

But when it comes to family court, both the definition and its application are often hotly contested, given the rights that flow from such a designation.

As the division or equalization of a separating couple’s property is governed by provincial legislation, there are different rules about the use and division of matrimonial homes across Canada. It is very important to know what the law is in your own province or territory.

In Ontario, for example, a matrimonial home is defined as “every property in which a person has an interest … 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.”

A number of complexities arise from this deceptively simple definition, which has been interpreted many times since the definition was introduced into the Ontario Family Law Act in 1986.

First, “every property” means that separating spouses may have more than one matrimonial home. Cottages, ski chalets, Florida condominiums and sailboats with sleeping and eating quarters have all been found by the Courts to be matrimonial homes.

To be a matrimonial home, however, the property must be “ordinarily occupied” at the time of the parties’ separation. These words, too, have been given a broad definition. Even if a cottage is not winterized and a couple separates in January, the cottage may still be a matrimonial home. Constant or continual occupancy is not required.

Generally, as long as the property has been used from time to time as the family’s residence prior to separation, the court will most often find that a vacation property is a matrimonial home. It need not have been used by the spouses when they actually separated, so long as it was used by the parties or members of the family within a reasonable period of time prior to the separation.

Nor does the couple or the family have to use every part of a property. When a couple’s residence at separation is a farm, for example, the matrimonial home is only that part of the property that may reasonably be regarded as “necessary for the use and enjoyment” of the residence.

Because homes in Ontario can include farm land, a few acres of trees, ponds, barns, granaries, guest houses, and buildings for machinery necessary to maintain the property, it is sometimes difficult to know how much of a property is actually the “matrimonial home.” Judges interpreting this provision have decided that entire farms can be matrimonial homes, if the farm was not a viable economic unit and the entire property was necessary for the enjoyment of a rural residence.

The question of what makes up the matrimonial home is particularly contentious because of the legal rights that flow from the designation, including what are known as possessory rights and property rights.

First, no matter which spouse owns the matrimonial home or the shares in the corporation which owns the matrimonial home, if there is a separation, either spouse can ask the court to grant “exclusive possession” that is, the right to live in the home, and evict the other spouse during the period of exclusive possession.

Second, even if only one spouse owns the home, the property-owning spouse is not allowed to sell or mortgage a matrimonial home without the consent of the other spouse — even prior to any separation.

The rationale for this is simply that the propertyowning spouse should not be able to do indirectly what he or she cannot do directly: If after separation, the nonowner-spouse might be entitled to exclusive possession, the property-owning spouse cannot thwart the other spouse’s right or potential to exclusive possession before or after separation, by selling the home out from under the spouse who has a right to exclusive possession. Nor can the property-owning spouse encumber the property, then default on the mortgage, and let the bank foreclose on the house, which would also have the effect of ending the “exclusive possession” of the spouse living in the home. The legislators obviously anticipated sneaky separating spouses!

The most common misconception about matrimonial homes is that the house is always equally divided at separation.

Again, while this differs by jurisdiction, in Ontario, the matrimonial home is treated as just one asset of many that must be “equalized” by the spouses.

There is at least one exception: A property-owning spouse who owns a home at the time of marriage, then sells it and buys another, can protect the equity from the original home from the division of assets.

These idiosyncrasies keep family lawyers in business and often result in a marriage contract: as the spouse owning the home at marriage can protect the equity in the matrimonial home at marriage by contract. What the contract cannot do, however, is confirm which spouse will have exclusive possession of the home if there is a separation. The Family Law Act allows marriage contracts to deal with ‘property’ rights related to a matrimonial home, but does not allow spouses to contract out of ‘possessory’ rights.’ This is why a spouse, throughout marriage, always has to get his or her spouse’s consent to the sale or mortgaging of a matrimonial home.

Until the legislators simplify the way in which matrimonial homes are treated, there will always be a need for family law advice.