Property rights when a marriage breaks down are governed by Part I and Part II of the Family Law Act (FLA). Part II deals specifically with the division of the value of the matrimonial home, while Part I deals with all other matrimonial property. It should be noted that only couples who have entered into a legal marriage may make use of these provisions of the law. This includes same-sex couples who have married in a legal marriage ceremony.
Common-law couples, regardless of the length of the relationship, cannot make an application under these parts of the Family Law Act. They have to use a different principle of law called “constructive trust” or “resulting trust” in order to obtain a share of property held in the other person’s name that was built up during marriage.
The FLA sets out that upon the breakdown of the marriage, it is the value of the property built up during marriage that is shared. This is done through a process called ‘equalization’. Equalization involves calculating each spouse’s net family property, and the spouse with the higher net family property must give the other spouse half of the difference between their net family properties.
Net family property is calculated by adding together the value of all of the spouse’s property that a spouse owns on the date of separation, minus some exclusions listed below, and then deducting the following:
- The spouse’s debts, and
- The value of property (apart from the matrimonial home) that the spouse owned on the date of marriage. (The value of any debts that the spouse had on date of marriage are deducted from this value first.)
The property exclusions, mentioned above are:
- Property (other than a matrimonial home) that was a gift or inheritance from a third party (i.e., not the other spouse);
- Income from this property, so long as the giver or testator specifically stated that this was to be excluded from the spouse’s net family property;
- Certain damages for personal injury settlements. Speak to your lawyer about this.
- Proceeds from a life insurance policy payable on the death of the insured person;
- Any property (apart from a matrimonial home) that was acquired with money from the above exclusions;
- Property that the spouses agreed by a domestic contract (marriage contract or pre-nuptial agreement) would be excluded from the spouse’s net family property.
When we are talking about a spouse’s property, this refers to anything held in that person’s name or bought by them, such as a car. Anything bought together, that is registered in both people’s names, is considered joint property. In this case, each person would claim half of the value.
Household items such as furniture and kitchen appliances are not usually valued individually, but are viewed as items to be divided to the satisfaction of both parties. The spouses themselves can decide who gets what furniture, as it will cost more than the value of the items themselves to have the lawyers debate who should get what.
The Matrimonial Home
You can see from the above lists that the “matrimonial home” is treated differently from the rest of the property brought into or acquired during the marriage. First, let us define the matrimonial home. This is a special legal term, meaning the home that the spouses lived in at the time they separated. Of course, if the home the spouses lived in at separation was rented or leased, then this property is not divided. Since no-one owns the property, there is nothing to divide.
The matrimonial home is treated differently from other property in that it does not matter if one spouse is not on title, or if one spouse brought the home into the marriage with them. No matter what, each spouse has an equal right to possession of the matrimonial home. If only one spouse is on title to the house, then that person is entitled to keep the house (because it’s in their name), but they must pay the other party 50% of the value of that house on date of separation.
One point to keep in mind is that only legally married spouses can make a claim like this. No matter how long you have been living together, if you are not legally married, you must make a claim under constructive trust for a portion of the value, although the value is almost certain not to be as much as 50%.
Another thing to keep in mind is that you can have more than one matrimonial home. If, apart from your everyday home, you also own a cottage, a timeshare or a houseboat, and these are used regularly by the family to live there while in the area, then this will also be considered to be a matrimonial home, and is subject to the same rights of possession and to claim part of the value as the primary residence.
In order to have a claim, one spouse need only have an interest (a part-ownership) of the residence. This means that if, for example, the wife owns a house with a third party (not her husband), and the husband and wife reside in the house at time of separation, the husband has a claim on the value of the wife’s interest.
This claim on the matrimonial home does not require that the person be on title, that they have contributed money toward the house, or even that they work at all. This claim is rooted in the court’s viewpoint that the marriage is a partnership, and that both parties contribute to the best of their ability. Work outside the home, or for pay, is not considered to be more valuable than taking care of the home and the children. If one person stays home and takes care of the home or children, this takes the responsibility for these tasks off the person working outside of the home. He or she can therefore focus on work and earn more than they could if they had to take the time to pick kids up from school, do grocery shopping and other such tasks.
Overall, it should be noted that while the court’s automatic assumption is that property should be equalized between the parties, if the marriage has been short (usually five years or less), one party can ask the court to award an unequal division of property, so that they get more than 50% of the matrimonial property. This is usually done where one person brought the matrimonial home into the marriage, or where one of the partners has drained the family assets by gambling or debts that the other spouse did not know about.
No matter in whose name title to the matrimonial home is held, both spouses have an equal right to possession of the matrimonial home. In certain circumstances, however, a request can be made to the court that one spouse be allowed to have exclusive possession of the matrimonial home. Courts will not always make such an order, and they are only granted when the court feels that it is necessary in that case, because it involves preferring one spouse’s right over the other’s. There is no specific test, but the court will look at issues such as the best interests of any children affected, at the financial position of each spouse, and will consider if any violence has taken place by one spouse against the other.