Dealing with a divorce can feel complicated—especially when significant assets are involved. After all, if you’ve been living together and then decide to separate, you’ll naturally wonder: what happens to the house in a divorce?
Below, we’ll provide a primer on how the division of property works in a divorce. From there, we’ll outline how the “matrimonial home” is typically distributed in a divorce.
Dividing Property in a Divorce
Before getting into what happens to the house in a divorce, it’s important to provide some context on how property is typically divided when parties separate or divorce.
The Family Law Act, R.S.O. 1990, c. F.3 outlines the principles and exclusions relevant to property division where married spouses divorce or common-law spouses separate.
The guiding principles relating to property division are as follows:
- When a divorce is confirmed, the parties must calculate their “net family property.”
- To calculate each spouse’s net family property, the parties will determine the value of their property (minus debts) at the time of separation and subtract the value of their property (minus debts) at the date of marriage.
- Once each spouse has calculated their net family property, the spouse with the higher net family property will pay the other spouse half of the difference as an “equalization payment.” For example, if one spouse has $250,000 in net family property and the other spouse has $150,000 in net family property, the spouse with $250,000 would pay the other spouse $50,000 (50% of the difference).
Remember that several exceptions apply to net family property calculation (including the matrimonial home’s treatment, as we’ll discuss below).
Additionally, the division of property process outlined above does not apply in all situations. For example, the parties might agree to divide their property unequally, or a court might order unequal property division. As the division of property can be complex and challenging, it’s always best to speak with an experienced family law lawyer for guidance on your unique situation.
Dealing with the Matrimonial Home in a Divorce
The Family Law Act provides a unique procedure for dealing with the matrimonial home in a divorce.
What is the “Matrimonial Home”?
Under Part 2 of the Family Law Act, the “matrimonial home” is defined as “every property in which a person has an interest, and that is or, if the spouses have separated, was at the time of the separation ordinarily occupied by the person and his or her spouse as their family residence…”
Pursuant to this definition, more than one property may qualify as a matrimonial home. For example, suppose the parties own a cottage or vacation property that they regularly use as a family in addition to their principal residence. That property may also be considered a matrimonial home pursuant to the Family Law Act.
The Family Law Act also grants both spouses an equal right to possess the matrimonial home (or homes). However, several exceptions exist to the classification of matrimonial homes outlined in the Family Law Act. We will discuss these exceptions in further detail below.
The Matrimonial Home Must Be Located in Ontario
To qualify as a matrimonial home, the property must be located in Ontario (so, even if you have a cottage in, say, Quebec that you frequently use or used as a family, it likely won’t qualify as a matrimonial home) and will instead be treated as regular property.
Treatment of Matrimonial Homes Located on Farmland or Used for Business Purposes
Matrimonial homes located on farmland or property used for reasons beyond the parties’ residence (for example, a business) are treated somewhat differently for divorce. For these properties, the matrimonial home is only considered part of the property that may reasonably be regarded as necessary for the use and enjoyment of the residence.
Consideration of the Matrimonial Home for Net Family Property
Under Part 2 of the Family Law Act, both spouses have an equal right to possess the matrimonial home. To that end, the value of the matrimonial home is typically divided between the two parties if they own the property jointly (or if only one party owns the property, the value of the matrimonial home will be included in their net family property.
Notably, suppose one spouse owned the matrimonial home before marriage. In that case, the value of the matrimonial home will not be deducted from their net family property calculation (meaning that the spouse who owned the matrimonial home before marriage will likely have a much higher net family property amount).
Possession of the Matrimonial Home After Divorce
While both spouses have an equal right to possession of the home, it doesn’t necessarily mean they have a right to ownership.
To determine how the property will be dealt with on divorce, the parties must either agree to possession or ownership of the house (this usually involves one party “buying out” the other party) or obtain a court order regarding possession of the matrimonial home. The parties may also choose to sell the matrimonial home, providing both parties consent.
With respect to possession, agreements and court orders for possession can be made on a temporary or final basis. To that end, the parties may agree to provide one spouse with temporary possession of the house for a certain period, or one of the spouses may seek a court order for temporary possession of the matrimonial home.
What Happens to the House in a Divorce? Our Final Thoughts
While this blog aims to provide a brief overview of what happens to the matrimonial home in a divorce, remember that the circumstances and options available will vary depending on the matrimonial home, the interests of the parties, prior agreements, and other factors.
Whether you are planning to create a prenuptial agreement or navigating the separation and divorce process, consult with an experienced family law lawyer to ensure you have the information and advice you need to move forward.
Contact Tierney Stauffer LLP in Ottawa for Comprehensive and Compassionate Family Law Advice
Tierney Stauffer LLP’s family law and divorce lawyers are passionate about serving clients who need help navigating the complicated family law landscape after a separation or divorce. We help clients understand their rights, obligations, and options while empowering them to make the best decision. To schedule a confidential consultation regarding your family law matter, please contact us online or call 1-888-799-8057.