NOTICE TO READER
The answer to each question below is a brief summary for informational purposes only and is only applicable in the Province of Ontario. It is not meant to be legal advice. If you require information or advice as it relates to your individual circumstances you are advised to consult with your own lawyer or retain the legal services of Veena Pohani.
Division of Property:
The matrimonial home is a special piece of property that is treated differently by the Family Law Act due to the fact that the home is where the family resides. The spouse who is not on title to the property, or in other words, is not the legally registered owner must claim a constructive/resulting trust on the property in order to assert his/her claim over the value of the property on the date of separation.
The value of property is generally defined as the value of the asset less any encumbrances on it. In other words, the net cost to purchase to the property is the value ascribed to the property.
The value of the property will be valued on the date the parties agree is the date of separation. This is known as the valuation date.
If both parents are title holders of the property, and own it as joint tenants or tenants in common, each property is entitled to the value of the property the date it is disposed of and not on the date of separation. A party that is not the legal owner of a matrimonial home is only entitled to the growth of the value of the home from the date of marriage until the date of separation. If a party is not on title, that party cannot claim ownership without making a constructive/resulting trust argument based on contribution to the home, or acquisition of the property.
Common law couples generally have to make a constructive/resulting trust argument in order to seek the value of the growth of the matrimonial home. The length of what constitutes a common law couple is generally three years of cohabitation, however, there are unique factors to each case that can be applied to argue that a common law status should be granted if cohabitation is less than three years. Factors such as the birth of children, blended families residing together, sharing and blending of assets are strong and compelling factors to motivate the courts to grant a common law status when the couple have been residing together for less than three years.
Calculation of Equalization Payment
This involves the calculation of your net family property after deducting all the liabilities and debts that you had on the date of separation, and deducting all the debts and liabilities you brought into the marriage.
All the assets you brought into the marriage that you legally owned on the date of marriage are deducted from the calculation of net family property.
Any inheritances, gifts, damages paid to you, insurance proceeds paid to you, that haven’t been blended together with your spouse’s property, are considered exclusions and kept out of the calculation of net family property.
As stated above the matrimonial home is a special piece of property. If you receive a cash gift from a friend or relative and you place that gift into the matrimonial home in the form of a down payment, renovation, home improvement or even to pay down the mortgage, that gift or inheritance can no longer be relied on as an exclusion. This gift must be traceable. That means that you must be able to show evidence tracing the dollar value of the gift towards the matrimonial home.
Each spouse has a right of possession to the matrimonial home. The Family Law Act specifically prohibits a spouse from alienating the other spouse’s right to possession of the matrimonial home. If your spouse attempts to eject you from the matrimonial home, be advised, you have the right to continue residing in that home. If there is domestic violence, or your spouse is a threat to you or the children’s safety, apply to the Court to obtain an order for exclusive possession of the matrimonial home immediately in addition to a restraining order, and custody if required. Exclusive possession is an order that grants you the right to live in the home free from the other spouse. You can even request that the other spouse continue to pay the household payments as part of your request for exclusive possession. This will obviously require a determination of all the facts before the court would order this.
Once all the debts and liabilities are calculated, the values of all the assets are obtained, (this can be obtained using valuations using appraisers, or business valuations or even black book values of vehicles) and all the deductions on the date of marriage and exclusions have been calculated, you can begin the process of calculating your net family property.
The spouse who has the higher net family property will owe the other spouse an equalization payment.
An equalization payment is a form of payment to equalize or apportion the assets equally between the spouses that they accrued during the marriage.
The definition of property can include items such the value of a copyright, an idea, time shares, and the value of a business such as a dental practice, or a company. In order to ascertain these values, we generally hire valuators or appraisers who will do a professional analysis of the value of these assets.
If a couple is married less than 5 years or a partner has gambled…. or squandered all the equity from the matrimonial home, maybe even hidden family property that was accumulated during the marriage, this would constitute grounds to claim an unequal division of assets. You could claim more than 50% of the assets accumulated during the marriage or ask that the other party receive less than 50%. The courts will consider these extenuating circumstances and allow for a division of assets that is less than 50% or more than 50% if you can establish it would be unconscionable to divide the assets equally. You must establish that it would shock the conscience of the court to divide the assets equally.
Please see the case of Stetco v. Stetco in which I acted on behalf of the wife.
Stetco v. Stetco, 2013 ONSC 3103 (CanLII) — 2013-05-29 on Canlii. org. This is a leading case in which the wife was given 100% of the net family property as the wife
had risen to the threshold of it would be unconscionable to share the proceeds of the matrimonial home in half.
Many times, a spouse will assert that they have loans and debts and will provide promissory notes from family members or friends. A debt will reduce the amount of net family property that a spouse has. The courts place a higher standard of proof on promissory notes issued by friends and family as the promissory notes do not come from an arms length institution such as a bank or lender. The audit trail required for a promissory note will require an indepth examination of the veracity of that loan before giving it a proper deduction.
You should consult with a lawyer at Veena Pohani and Associates in order to help you ascertain your net family property.
The calculation of net family property and your equalization payment can be complex if there is a pension, non tangible assets as mentioned above requiring professional valuations, or multiple properties.
Contact a lawyer in order to preserve your rights.
If I leave the matrimonial home, will it affect my rights?
A matrimonial home is any property you have an interest and which you were habitually using as a family residence at the time of separation. More than one home can be deemed to be the matrimonial home, and this often included cottages or vacation properties.
No. If you leave the house, you still have an equal right of possession no matter how long you are out of the house, whether you are on the title deed or not. Each partner has equal rights of possession and is not lost until preempted by an order of the court or an agreement.
The matrimonial home is afforded preferential status under the Family Law Act in that the person who does not have an interest in the home or is not registered on title can still restrict the legal owner’s right to sell or encumber the home without his/her consent. In other words, the law allows a spouse who is not the legal owner to restrict the alienation of the matrimonial home.
Contact one of our lawyers so that we can advise you on how to deal with the division of property, and realize the maximum rights you have on your property accumulated during the marriage or common law relationship.