What are your rights with regards to real estate after divorce in Ontario?
The end of a marriage is usually challenging emotionally and financially no matter the circumstances regarding how the marriage is ending. However, dividing property, assets, and figuring out what to do with the family home after divorce can be even more challenging.
This article is meant to help you understand what your rights are with regards to real estate after divorce in Ontario, understand what your property ownership rights are and how your property ownership rights are related to the division of property after divorce in Ontario.
If you have any specific legal questions related to your specific situation, you need to consult a divorce attorney and maybe even a real estate attorney who handles divorce sales as needed. This article is only meant to be a primer on your property rights when you are getting divorced in Ontario.
For a more detailed discussion about the division of property after divorce in Ontario, check out “Things You Should Know About the Division of Property After Divorce in Ontario”, to learn more about getting a new mortgage after divorce “Getting a new mortgage after a divorce: How to get a new mortgage after divorce” or about selling your home after divorce [How to Sell Your Home After Divorce?].
For this article, “married” is defined as a couple who have or had a legally recognized marriage. A legally recognized marriage would be a marriage where the couple had a marriage ceremony performed by an individual who had the legal power to marry them, such as a judge, a justice of the peace, religious official, etc.
Couples who live together for at least three years as spouses in Ontario that are not legally married to each other are considered in the eyes of the law to be in a common-law relationship. You could have lived with your common-law partner for many years, have children together, and even refer to your common-law partner as your “husband”, “wife”, or “spouse” but this does not mean that you and your common-law partner are or were legally married.
When dealing with family law issues in Ontario related to spousal support, child support, custody, and access, in the eyes of the law, it does not matter if you and your spouse are or were legally married or living in a common-law relationship. The rules in these instances are the same for married and common-law couples.
However, when it comes to instances where you are dividing property and assets, making decisions about what happens to the family home and who is allowed to remain in the family home, making decisions about selling the family home, and/or figuring out who is entitled to receive the benefits from the sale of the family home, the rules will be different for married couples than they would be for couples in couple-law relationships.
When it comes to property rights, the right to remain in the family home after divorce, deciding to sell the family home after divorce, and who is entitled to receive a portion from the proceeds from the family home, whether or not you and your partner are or were in legally recognized marriage will determine what your rights are and will be.
What are your rights concerning the matrimonial home when you are getting divorced in Ontario?
Under Ontario’s Family Law Act, the matrimonial home (the family home) is given a special legal status and will be treated differently than other assets or properties that you own(ed) individually, your spouse owns or owned individually, or with your spouse.
Given that the matrimonial home is granted a unique legal status for couples who are or were legally married (your marriage to your current or former spouse is/was legally recognized) this makes dividing the matrimonial home and determining what will happen with this home after your divorce more complex. It can be incredibly challenging for couples to figure out what to do with the matrimonial home because this home might be one of the largest and/or valuable assets they may ever own.
However, if your marriage is or was legally recognized in Ontario, you will have more rights as it concerns the matrimonial home than you would if you were unmarried or in a common-law relationship.
Both you and your spouse have an equal right to continue living in the matrimonial home until the matrimonial home is sold, a judge grants a court order that requires one spouse to move out, or you reach a formal resolution about who is staying in the matrimonial home.
The matrimonial home’s unique legal status under the Ontario’s Family Law Act means that both spouses have an equal right to possess the matrimonial home. This right to equal possession of the matrimonial home will continue after you and your spouse have legally separated, unless, or until both parties reach a separation agreement or family court judge grants a court order that establishes that one spouse is exclusively entitled to have ‘exclusive possession’ of the matrimonial home pending a family court trial.
When a family court judge grants a court order in favour of one spouse being able to maintain exclusive possession of the matrimonial home, this spouse will be the only spouse who will be able to legally be allowed to live in the home, no matter who legally holds the title for the matrimonial home.
Therefore, according to Ontario’s Family Law Act, both spouses are allowed to stay and live in the matrimonial home until or unless a formal resolution is reached regarding the possession of the matrimonial home or one spouse has been granted exclusive possession of the matrimonial home. Neither spouse is allowed to prohibit the other spouse from living in the matrimonial home. Additionally, neither spouse can change the locks to the matrimonial home in an attempt to lock the other spouse out of the matrimonial home.
In many cases, if a couple has children together, their children will probably stay in the matrimonial home. While legally you might maintain the same right to possession of the matrimonial home, it might not be recommended or realistic for you and your spouse to continue living together while you are getting divorced.
If you and your spouse were married and then were legally separated and one spouse decides to move out of the matrimonial home, you will not legally be allowed to change the locks when your spouse moves out. Under the Ontario Family Law Act, you have no legal grounds that allow you to change the locks when your spouse moves out as to lock them out of the matrimonial home.
It is important to note that if one spouse decides to move out of the matrimonial home, the spouse who moves out will not be entitled to be able to come-and-go from the matrimonial home at will. If they (the spouse who moved out) will be coming or going from the matrimonial home, they will be required to provide the spouse who stayed in the matrimonial home, with reasonable and adequate notice of any intention they might have to return to the matrimonial home.
For example, you continued to live in the matrimonial home and your spouse moved out before you were legally separated, and your spouse needed to return to the matrimonial home to collect the personal property they left behind, they will be required to provide adequate and reasonable notice of their intention to return to the matrimonial home to collect their personal property. In other words, your spouse cannot show up out of the blue one day at the matrimonial home, without providing any advanced notice of their intention to return to the matrimonial home.
What is an order of exclusive possession and how does it affect your right to the matrimonial home?
An order of exclusive possession is a court order granted by a family court judge, that permits only one spouse to live in the home. This means the other spouse, when an order of exclusive possession has not been granted in their favour, will be legally required to move out of the matrimonial home and live somewhere else.
If a family court judge grants an order of exclusive possession of the matrimonial home in your favour, you will be the only spouse permitted to legally live in the matrimonial home. Please note if domestic violence is occurring in the matrimonial home and you believe that you are being abused by your spouse, you might consider applying for an order of exclusive possession.
You should also probably find an advocate and other support who can help you through this situation, inform you of your rights in this situation as a victim of domestic violence. A trained advocate and others can help you devise a safety plan if you are worried that your spouse might harm you, your children, pets, family, or cause damage to your home.
However, there are some cases when a family court judge might grant an order of exclusive possession, where the court might order for the lock(s) for the matrimonial home(s) are changed, if there are in fact circumstances that create a situation where the locks for the matrimonial home might need to be changed to protect your safety.
You must know that orders of exclusive possession of the matrimonial home are not meant to last forever, they are only supposed to last a certain period of time. Orders of exclusive possession of the matrimonial home usually allow for the other spouse to be legally entitled to periodically re-enter the matrimonial home assuming they are providing the spouse who is living in the matrimonial home adequate and advanced notice of their intention to re-enter the matrimonial home.
Furthermore, it is important that you understand that when the court grants an order of exclusive possession of the matrimonial home in favour of one spouse, the court is ONLY providing one spouse with the exclusive right to remain in the matrimonial home while ensuring that the other spouse must live elsewhere.
When a judge grants order of exclusive possession of the matrimonial home, they are not trying to imply that the spouse who is allowed to remain in the matrimonial home should be the one to get the matrimonial home and the spouse who is forced to vacate the matrimonial home should not be allowed to own the matrimonial home.
Having an order of exclusive possession of the matrimonial home granted in your favor DOES NOT allow you, the spouse who is legally allowed to stay in the matrimonial home to legally sell or dispose of any furniture, personal property or other belongings until a court has fully resolved all of the issues related to separation and divorce, this includes the equalization of any net family property.
Here is something to keep in mind, if an order of exclusive possession is granted in your favour, this DOES NOT allow you to sell or dispose of all of your spouse’s belongings or any shared items. Do not go thinking that now your spouse has been forced to vacate the matrimonial home that now will be a great time to do a Mari Kondoesque purging all of your shared belongings with your spouse.
If you sell or dispose of shared possessions without your spouse’s permission, you could be in big trouble down the road. Do not use this as an opportunity to take out your feelings and emotions on your spouse by doing something to or with their belongings. If you are struggling with dealing with everything related to your divorce, there are healthier, more productive, and constructive ways of dealing with your feelings.
Most importantly, if a court grants an order of exclusive possession of the matrimonial home in your spouse’s favour or in your favour, this will not affect your property ownership rights. It is important to note that when a court grants a temporary order of exclusive possession, this is intended to provide you and your spouse with time to craft a completed separation agreement.
Neither you nor your spouse is allowed to sublet, rent, sell, refinance, mortgage or place a line of credit on the matrimonial home without first receiving written permission from your spouse.
The unique protected status granted to the matrimonial home under Ontario’s Family Law Act means that you cannot do anything major to the matrimonial home or make any major decisions about the matrimonial without first receiving your spouse’s written permission.
You and your spouse must decide on whether or not to sell the matrimonial home jointly. However, if your spouse agrees to sell matrimonial home and then they do not cooperate with your efforts to sell the matrimonial home, you might need to initiate an application with the court to ask them to make it possible for you to sell the matrimonial home.
If you are in a situation where your spouse had previously agreed to sell the matrimonial home but has created obstacles to you selling the matrimonial home, you should speak a divorce lawyer about what your options are to ensure that you ultimately sell your family home. If your spouse has agreed to sell the matrimonial home, they are not allowed to create obstacles that would prevent you from selling the matrimonial home.
The rules of ownership for the matrimonial home and how these relate to your rights to the matrimonial home and the division of the matrimonial home after a divorce
First, it does not matter whose name is currently on the title and deed for the home, if both of you have lived there together as a married couple before the date of your separation, this home is still the matrimonial home. Before you ask, yes you theoretically could have bought, owned, and lived in what is now the matrimonial home, before you even met and married your spouse and your home is now the matrimonial home.
The moment that you and your spouse get married and moved into your home together following your marriage before the date of separation, this home will automatically become the matrimonial home. Once a home is viewed as a matrimonial home, in the eyes of the law, it will not matter who owns or owned the home.
Even if the home that became the matrimonial home was gifted to you or you inherited it before your marriage, but your spouse moved in after you were married and you were living there together before the date of separation, this home will be considered the matrimonial home. However, your inheritance or any money gifted to you would be exempt from division UNLESS you are putting money from your inheritance or funds that were gifted to you into the matrimonial home.
Additionally, it is important to note that if the funds that you used for your down payment to buy the matrimonial home were gifted to you, your spouse is not going to be legally required to repay for the gifted funds for the down payment. You can always do your best to negotiate with your spouse to ensure that they repay the gifted funds for the down payment, but no court will legislate this. The matrimonial home will always be divided except in instances where you have a prior marriage contract which outlines how the matrimonial home will be divided.
Special considerations about your rights concerning the matrimonial home for people in common-law relationships in Ontario
If you are in a common-law relationship (this would be the case in Ontario if you and partner have been living together for at least three years) the rules concerning the matrimonial homes for married couples do not apply in this situation. If you are in a common-law relationship in Ontario, you will not enjoy the same property ownership rights as couples in legally recognized marriages who are getting divorced.
Usually, if you are in a common-law relationship the matrimonial home will belong to whomever the home is registered to. However, this might not necessarily be the case if you have a signed cohabitation agreement with your partner that details how the matrimonial home and how the value of the matrimonial home will be divided. It is important to note that your cohabitation agreement is recognized as being legally binding then you will have to follow this agreement.
As a general rule, with most common-law relationships whatever you came into the relationship with, will continue to be yours whenever you leave the relationship. Since common-law couples in Ontario do not enjoy the same statutory property rights as married couples you might not be legally allowed to remain living in the family home if you if it is in your partner’s name instead of being in your name.
Since common-law couples in Ontario do not have the same statutory property rights as married couples in Ontario, if one common-law spouse owns the matrimonial home, the spouse who owns the matrimonial home will be able to sell the home, mortgage it, rent it, etc. without needing to ask for the other common-law spouse’s permission first. This holds true no matter whether you have lived with your common-law spouse for five years or twenty-five years.
It is important to note that if your common-law partner is abusing you that you might be able to remain in the matrimonial home even if the matrimonial home is not registered to you. In order for you to be able to stay in the matrimonial home if your partner is abusing you, you will have to apply for and have a restraining order granted that says that your abuser is not allowed to enter the property, that will permit you to continue living in the matrimonial home.
If you believe that your common-law partner is abusing you, you should consult a lawyer and learn more about what your options are. However, you must know that it might be challenging for you to get a restraining order that allows you to stay in the matrimonial home and prohibits your common-law spouse from entering the matrimonial home.
What are your property ownership rights in Ontario when you are dividing property during or after a divorce?
For this article, the property includes money (investments, cash, etc.), pensions, Registered Retirement Savings Plans (RRSPs), insurance policies, and disability benefits, other financial assets, real estate, businesses, frequent flier miles, and any other assets that a couple has. Property is defined as anything you own.
The property, when you are dividing up property and assets with your spouse when you are separating or getting divorced is everything that was previously mentioned, and this could also be cars and other vehicles, personal items including clothing, jewellery, and artwork, household items, such as furniture, appliances, electronics, antiques, etc.
Property ownership rights for married couples getting divorced in Ontario
When you are getting divorced in Ontario, any property that you or your spouse acquired during the marriage need to be divided equally. In Ontario when a marriage ends, in the eyes of the law, each spouse’s contribution to the marriage will be taken into account. Therefore, any property that is acquired during a marriage that exists at the end of the marriage must be divided equally.
If your spouse owns property and/or assets that are worth more than your property and/or assets, then they must pay you or give you half value between their property and your property/assets to help ensure that both you and your spouse are leaving the marriage on equal footing. This is known as an equalization payment, for more information on equalization payments check out our article, “Getting a new mortgage after divorce: How to get a new mortgage after divorce”.
If you are unable to come to an agreement about how to divide matrimonial property and assets with your spouse when you are separating or getting divorced, you can have a court decide for both of you how to divide property and assets. However, if you are planning on doing this, you will need to file a claim within six years of legally separating from your spouse or within two years of finalizing your divorce with your spouse.
Given that in Ontario, married spouses will be required to equally divide all of the property acquired during a marriage, in the eyes of the law, it does not matter who will be paying for things or whose name is on the title or the deed for the matrimonial home. The value of the matrimonial home should be equally divided between spouses even if one spouse owned the matrimonial home before they married their spouse.
Nevertheless, there is a notable exception to the rule that dictates the equal division of the value of the matrimonial home between spouses. If one spouse owned the home that the couple used as the matrimonial home, but if the spouse who owned this home sold it before the marriage ended, the spouse who owned and sold the home, will be permitted to count the value of the home on the date of the marriage as property they owned before the marriage and the value of this home will not have to be divided equally. [Things You Should Know About the Division of Property After Divorce in Ontario]
Therefore, if the matrimonial home was previously solely your home and you did not sell it before your marriage ended, you would be legally obligated to give your spouse one half of the total value of the matrimonial home upon the date of the separation. However, if you had owned the matrimonial home before your marriage and sold it before your marriage ended, in this instance you would only be responsible for paying your spouse for half the value of the home from the date of the sale minus the value of the home on the date of your marriage.
Additionally, any property owned by either spouse at the beginning of the marriage whose value increased during the marriage, the other spouse will share in the gain in this property’s value. When the other partner shares in a partner’s gains when they are getting divorced, this settlement is referred to as an equalization payment because this payment is meant to serve as an equalization of the Net Family Property. To learn more about equalization payments and NFP, check out our article “Things You Should Know About the Division of Property After Divorce in Ontario”.
Nonetheless, any gifts and/or inheritances that a spouse received before or throughout the marriage from an individual that is not the other spouse that is not used towards the matrimonial home will be considered excluded assets and property and this will be excluded from an equalization payment.
For a more in-depth examination of how property is divided when you are getting divorced in Ontario and discussion of how to calculate equalization payments when you get divorced in Ontario, check out our article “Things You Should Know About the Division of Property After Divorce in Ontario”
The difference between dividing assets or property with the matrimonial home versus dividing other assets such as a bank account with your spouse when you are getting divorced and your rights to property
It is important to note that Ontario’s Family Law Act treats the matrimonial home differently than other assets. With the matrimonial home, if you and your spouse bought the matrimonial home together, you would be legally entitled to half of the total equity in the matrimonial home. However, for other assets that are not the matrimonial home, i.e. for this example, bank accounts, the rules which dictate how much your spouse is entitled to are different.
When dealing with assets like bank accounts each spouse is legally permitted to perform the following deduction: the bank account’s value at the date of separation minus the bank account’s value at the beginning of a marriage and halve this value. The example outlined below usually will apply to most cases but if you are not sure how this might apply in your case, especially if you have a marriage contract that outlines the division of property and assets when your marriage ends, you should consult a divorce lawyer.
The following is an example that will help you understand how dividing assets and property in this case a bank account versus the value in the matrimonial home are different when getting divorced in Ontario.
You entered your marriage with $500,000 in your bank account and the balance of your bank account remained the same until you were separated. During the marriage, you earned $50,000 in interest for this account and on the date of separation, this bank account was worth $550,000.
In this hypothetical scenario, we are going to assume that neither you nor your spouse has any other assets or debts. In this scenario, you would then divide interest for this account accrued in half. Your spouse would be entitled to receive $25,000, half of the interest the account earned. After paying your spouse $25,000 you would be left at the end with $525,000.
Now picture another hypothetical scenario. Instead of entering the marriage with a bank account that is worth $500,000, you enter the marriage with a home worth $500,000. After you and your spouse get married, your spouse moves into your home and your home immediately is considered to be the matrimonial home.
During your marriage, your home, the matrimonial home increases in value to $550,000 and is worth $550,000 on the date of you and your spouse’s separation. Let’s assume for the sake of argument that you and your spouse have no other assets or debts. In this scenario, you would be paying your spouse $250,000 more than you would have paid them otherwise if you had a bank account instead of the matrimonial home.
It is important to note that the payment that you would be making to your spouse during your separation or your divorce would be known as an equalization payment. Legally, when a marriage ends in Ontario, the provisions that are a part of the Family Law Act concerning property divisions will be set into motion.
This means that property will be divided equally between spouses. However, this division of property is subject to certain rules and exceptions. The matrimonial home is one of the most notable exceptions. If you have any specific questions about how this works, you should consult a divorce lawyer.
For an in-depth exploration of how property is divided when you are getting divorced in Ontario and discussion of how to calculate equalization payments when you get divorced in Ontario, check out our article “Things You Should Know About the Division of Property After Divorce in Ontario”.
Property rights for common-law couples in Ontario
When you are in a common-law relationship you will not automatically be legally entitled to your spouse’s property. Yes, you can ask a court to order your common-law partner to give you some of their property if you are able to demonstrate that your actions during the relationship made it possible for your spouse to acquire that property or wealth or your actions significantly contributed to your partner’s wealth. If you are considering making this claim, you need to file this claim within two years of separating from your common-law partner.
Usually, when a common-law relationship ends, each spouse will be keeping the property and assets they brought with them into the relationship along with anything they bought when they were in the relationship. The only property that will be divided equally when a common-law relationship ends will be any property or assets where both partners are listed as the owners.
However, if a common-law couple has a cohabitation agreement, their property and assets will be divided according to whatever is outlined in their cohabitation agreement. Common-law couples like married couples are also able to write a separation agreement outlining how they will divide their shared property and assets.
For a more in-depth discussion about how property is divided after divorce and when a common-law relationship ends check out our article “Things You Should Know About the Division of Property After Divorce in Ontario”
For more information on selling your home after your divorce, check out our article “How to sell your home after a divorce”. If you are looking to learn more about managing the real estate after divorce, check out “How to manage real estate after a divorce”.
Hopefully, after reading this article you will have gained greater insight into what your property ownership rights are when you are getting divorced in Ontario, have developed a clearer understanding of what the matrimonial home is, what your options are when it comes to dealing with the matrimonial home, and how property division works when you are getting divorced in Ontario.
This cannot be said enough, divorce can be incredibly stressful, emotionally, financially, etc. If you are considering getting divorced or getting divorced, we cannot stress the importance of why you need to have a support system of people who are helping you through the emotional, financial, legal, logistical, and other challenges that you will face getting divorced.
Having professionals who you respect, feel comfortable working with and can trust can help to ensure that the process of getting divorced might be a little bit easier. Additionally, spending the money now to help ensure that you are receiving solid advice and guidance can help save you time, stress, and money.