The matrimonial home is often the largest and most significant asset of a married couple and tends to be a place of emotional investment, so it comes as no surprise that Ontario family law includes strict rules concerning the rights of married spouses to deal with a matrimonial home. These rules apply to all married spouses, whether a couple is happily married or in the throes of a bitter separation. As a result, any spouse looking to transfer, buy, sell, refinance, or otherwise dispose of their interest in a matrimonial home should be aware of these rules, lest they impede a contemplated transaction.
- What Is The Matrimonial Home?
- Alienation Of The Matrimonial Home
- Matrimonial Home Designation
- Legal Planning
Note: any reference to spouses in this article is only to legally married spouses and not common-law partners.
What is the matrimonial home?
Under Ontario law, a matrimonial home is considered to be every property in which either spouse has an interest, and which is currently, or was at the time of separation, “ordinarily occupied by the person and his or her spouse as their family residence.” Notably, this definition can include more than one home, and does not require that both spouses have a legal titled interest in the property. For example, a property registered in the name of only one spouse may still qualify as a matrimonial home, provided it meets all other criteria. This is often the case particularly where spouses move into a home owned by one spouse prior to marriage.
Alienation of the Matrimonial Home
A spouse cannot “dispose of or encumber” any interest in property that qualifies as a matrimonial home without the consent of the other spouse or without a court order. For most spouses, this means that one spouse must obtain the signed consent of the other spouse in the event of a transfer, sale, or mortgage of the matrimonial home. Failure to obtain the consent of the non-titled spouse could result in a judge setting aside the transfer, sale, or mortgage, except where the other party to the transaction (that is, the transferee or mortgagee) acquired the interest in good faith, for value, and without notice that the property was a matrimonial home.
Consider the consequences for a person who enters into an agreement to purchase an investment property but wishes to finance that purchase with a new mortgage on their matrimonial home. When the lender’s lawyer discovers that the property to be mortgaged is a matrimonial home, they will require the borrower to obtain spousal consent to the mortgage. If the spouse, for whatever reason, refuses to consent to the mortgage on the matrimonial home prior to the closing date, the purchaser may find that they do not have sufficient financing to close their purchase, exposing them to potential litigation and the loss of their deposit.
Matrimonial Home Designation
Either spouse can register a matrimonial home designation on the public land registry system without notifying the other. The matrimonial home designation serves as a warning to potential purchasers and/or lenders that the transaction could be set aside by a judge if no spousal consent is obtained. This is a prudent step for a non-titled spouse to take where they believe the other spouse may deal with the property without their consent. Practically speaking, the designation will prevent any dealings with the property – that is, until the matrimonial home designation is canceled; either voluntarily by the registrant or by court order. The right to register a matrimonial home designation ends upon divorce and any designation registered prior to a divorce can be canceled upon the registration of the divorce judgment.
Legal Planning
It is important that you consult with a family lawyer and/or real estate lawyer prior to dealing with a property that may be the matrimonial home. Doing so will allow you to anticipate and possibly avoid unnecessary pitfalls when dealing with your real estate. A non-titled spouse should also consult with a lawyer in order to protect themselves when they are concerned their spouse may unlawfully deal with a matrimonial home without their consent.
At Hummingbird Lawyers LLP, our experienced family lawyers and real estate lawyers can help you plan your transactions involving the matrimonial home and can help you minimize the associated risks. We take the time to walk you through your options and ensure that you are comfortable with your choices.
For more information, please contact our office. Our lawyers are always available to help.
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