Property division is an important topic of discussion, and at times a point of contention, when it comes to divorce in Ontario. Within the topic of property division, there are two primary concepts that individuals going through a divorce must understand: matrimonial home rights and the equalization of net family property (NFP).
These legal aspects play a significant role in determining how assets are distributed between separating spouses, whether they are legally married or in a common-law relationship. In this article, we delve into these topics to provide you with a comprehensive understanding of your rights and responsibilities during a divorce in Ontario.
What is a Matrimonial Home?
A matrimonial home, as defined by Section 18 (1) of Ontario’s Family Law Act, is “every property in which a person has interest and 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 is their matrimonial home.”
Contrary to common misconceptions, a matrimonial home can encompass various property types, including houses, condos, or apartments, as well as a cottage or vacation property. It doesn’t necessarily need to be jointly owned by both spouses. If it serves as the primary residence for the family at the time of separation, even if owned by only one spouse, it qualifies as the matrimonial home.
Understanding the significance of the matrimonial home is important, as it plays a pivotal role in property division during divorce proceedings. Both spouses have equal rights to the matrimonial home, regardless of ownership or whose name is on the title; however, there are exceptions and scenarios where these rights may differ, which we will explore further.
Matrimonial Home Rights – Ontario
In Ontario, the Family Law Act grants both spouses an equal right to possess the matrimonial home, regardless of ownership. These rights continue until the couple officially divorces or until a court orders otherwise.
Can the Matrimonial Home be More Than One Property?
Contrary to a popular belief, more than one home can be classified as a “matrimonial home”. If even one of the spouses regularly used more than one property at the time of separation, such as a primary residence and a cottage, both properties may qualify as a matrimonial home.
Equalization of Net Family Property (NFP)
The concept of Net Family Property (NFP) is also central to property division in Ontario. In short, it aims to balance the scales of asset and debt ownership arising from the parties’ marriage. To balance the scales, the spouse with the greater marital net worth has to pay to the other an equalization payment to balance the scales.
However, it is significantly more complex as there are questions about calculating values, deducting items owned on the date of marriage, inheritances, gifts, exemptions, and more.
Notably, matrimonial home ownership plays a HUGE role in calculating parties’ NFPs. Parties should note that if a home has status as a “matrimonial home”, it is treated differently than other assets owned before marriage, inherited, or gifted to one, or both, of the spouses.
Common Law Spouses and Property Division
Married couples are afforded different protections than those in common-law relationships in Ontario. While married spouses benefit from matrimonial home rights and NFP equalization, common-law couples do not have the same rights.
In common-law relationships, the division of property is governed by different rules, and matrimonial home rights do not apply. The idea of a ‘matrimonial home’ does not exist in common-law relationships; however, if you made significant financial contributions towards your common-law partner’s home, you may have a right to a portion of it upon separation. Legal agreements or court orders may be necessary to establish your claim.
This is a VERY complex area of law and you should contact legal counsel if you are considering pursuing a claim, or if you are defending against a claim in this area.
Seeking Legal Guidance With Alves Law
The intricate terrain of matrimonial home rights, NFP equalization, and property division should not be navigated alone. The insight of a veteran spousal support lawyer , property division lawyer or divorce lawyer can help you understand your rights and obligations.
If you want to ensure you are treated fairly, contact Alves Law today. Our team of professionals will work diligently to safeguard your rights.
