A common issue that arises in many separations in Ontario is whether you can force the sale of the matrimonial home. Last week, the Ontario Superior Court of Justice issued a decision that addressed this issue.
Can I buy out the other spouse’s share in the matrimonial home in Ontario
Prior to looking at whether you need to force a sale, the first step in the process should be to negotiate with the other party to see if one person will buy the other person’s share in the home. Selling a home at an inopportune time may lead to a financial loss for both parties when you consider the possibility of fees to break the mortgage, as well as fees to sell the house such as realtor fees and legal fees.
The problem with one person buying the other out is that you have to agree on a value. The only true way to know the value of a matrimonial home is to put it on the market and have a third party determine the value. However, if you agree on the value, perfect. If you can’t agree on the value, then you can hire an appraiser. But what if one of you doesn’t agree with the appraised value, then you are right back to where you started.
Determining value can be difficult and if you cannot find a way to agree, then your only option will be to sell the house.
I am living common-law in Ontario, do I have a right to the home we live in?
Another consideration on this issue is for common-law couples as it relates to the house they live in. The starting point is the observation that if you are not married in Ontario, you have absolutely no automatic property rights. This means that if you live in a house where only the other person is on title, you have no automatic right to an interest in that house.
If you are both on title to the house, then there is no issue, but keep in mind that it likely would not be a family law situation at that time. Either person who holds title to a house can force the sale of that house. The situation would be the same no matter if you lived in the house as a couple, or you were roommates that shared the purchase of the house to cut down on monthly expenses.
There are some exceptions to this general rule, but you will need to speak to a lawyer to determine if these exceptions apply to you. For the most part, proving an exception can be a difficult and expensive process with no certainty in the outcome. Also keep in mind that these exceptions only apply to “exceptional situations”. This would include situations where the parties reside in the matrimonial home as a family, where one spouse stays matrimonial home to look after the children while the other spouse works. If this situation were to go on for ten years or more, it may be unfair to simply state that the person who holds title should be the only beneficiary. This is not legal advice and you need to speak to a lawyer if this sounds like your situation.
Considerations in forcing the sale of the matrimonial home in Ontario
The starting point for the analysis is found in section 3 of the Partition Act. This legislative provision states that anyone with an interest in the land can bring an application for the sale of that land. Further, the court can direct the sale of the land if the court considers the sale to be “more advantageous” to the interested parties.
In Ontario family law proceedings, the principles governing the sale under the Partition Act were articulated by the Ontario Divisional Court as follows:
- A joint tenant (that is someone who is jointly on the title of the house) has a prima facie right to an order to sell the property with another joint tenant.
- A court must order the sale unless the person opposing it has demonstrated that the order should not be made.
- The party opposing the sale must show “malicious, vexatious or oppressive” conduct to avoid the order and that conduct must relate to the sale issue and not to the general conduct of the person bringing the motion.
Forcing the sale of the matrimonial home prior to trial
If the court considers that the matrimonial home be sold, the next step in the analysis is whether sale should be ordered before trial. In that case, the court must consider whether the person opposing the sale would be prejudiced by the sale. An example of this is if the person opposing the sale has a legitimate claim for exclusive possession of the matrimonial home or an equitable claim for that property. In that case, if the sale was forced prior to the trial, then the opposing spouse would have no chance to advance their claim.
The second consideration is whether it is in the children’s best interest to order the sale of the house. This requires actual evidence. As will be discussed, simply stating that the child needs stability is not going to be enough to prove the child’s best interest. Typically, this means evidence from a medical practitioner, to say that specific to these children, that they need to remain in the matrimonial home. This may be as a result of anxiety from moving that would be harmful to the child which may already be exacerbated by the ongoing separation and litigation. Again, this evidence needs to be from someone qualified to give the evidence, not a parent looking for an advantage in the litigation.
Considerations for having exclusive possession of the matrimonial home pending trial
The most important thing to consider
Section 24 of the Family Law Act provides the considerations a court must examine when determining whether to order the exclusive possession of the matrimonial home. This legislation states:
(3) In determining whether to make an order for exclusive possession, the court shall consider,
(a) the best interests of the children affected;
(b) any existing orders under Part I (Family Property) and any existing support orders or other enforceable support obligations;
(c) the financial position of both spouses;
(d) any written agreement between the parties;
(e) the availability of other suitable and affordable accommodation, and
(f) any violence committed by a spouse against the other spouse or the children.
In the decision I am looking at today, the court reviewed these factors and made a number of comments that can be useful for your family law litigation. In this case, the court found that though there were children, ages 17 and 13, their stability would not be affected by the sale of the house, since there was a shared parenting arrangement.
The next consideration was that the spouse opposing the sale was receiving $10,289 per month in child support and spousal support. Given this high level of support, the court was not persuaded that the person opposing the sale would not be able to find alternative accommodations.
The court then considered that because of the support payments, the net disposable family income was split 50/50 and therefore there was no significant financial imbalance between the parties.
The court then considered the argument that the house should not be sold during the school year, as it would be disruptive for the children. The court agreed with this argument and found that the house should be listed for sale, though a possession date would not be prior to the end of the school year.
The matrimonial home in most separation proceedings is the single most valuable asset. It is important to obtain legal advice on how to deal with this asset both prior to trial and at trial. Contact Hearty Law to schedule a consultation if you have questions about your matrimonial home or other family law issues.