Going through a divorce or separation can be one of the toughest transitions of your lifetime. Beyond all of the personal and familial aspects of this type of change, there are some pretty significant financial and legal processes to sort out as well. With that in mind, one of the biggest what-ifs that comes up during a divorce or separation is what happens to property owned before marriage in Ontario?
If you and your spouse bought your house together, you’ll both have equal rights to the property in the event of a divorce. But what if one person owned the home independently before getting married?
In this blog, I’ll go over what happens to property owned before marriage in the event of a divorce – along with a few other important considerations for anyone navigating this type of life change. Let’s get started!
Need help deciding which spouse will keep the matrimonial home? Read my blog post about it.
Matrimonial Property Law: The Basics
Before we get into the specifics, one term to get familiar with is ‘matrimonial home’. This is just a formal way of referring to a couple’s primary residence.
In Canada, the legal framework for divorce and couples’ rights is largely outlined at the federal level. However, some regulations – like how shared assets are split up (including the home) fall under the jurisdiction of each individual province. In Ontario specifically, the rules and regulations regarding the shared matrimonial home are defined in the Family Law Act.
Starting from the very top, once two people in Ontario are married, they share equal rights to the matrimonial home. This type of blanket protection is designed to ensure that both spouses are looked after in the event of a divorce.
However, because matrimonial home rights in Ontario are somewhat one-size-fits-all, they can cause confusion, frustration, and other complexities when couples are forced to divide their assets.
What Are My Rights if I Leave the Marital Home?
Let’s say you and your spouse are separating, and you would like to move out. Would that impact your rights to the home? The simple answer is no.
Once you’re married, you and your spouse are entitled to equal shares of your home. That doesn’t change during separation.
If you choose to leave the marital home as part of your divorce or separation, your former spouse will need to buy you out. Once they do, the property will be solely theirs.
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How Much Does My Ex-Spouse Owe Me For My Share of the Home?
One of the more complex aspects of a spousal buyout is equity. In other words, if one person will be buying out the other’s share in the home, you’ll need to figure out how much that share is worth.
Here’s where things can get complicated in a hurry. Like any piece of real estate, your marital home doesn’t have an objective monetary value. Rather, its approximate worth is really up to the market. Making things even more challenging, both you and your former spouse will need to agree on the final number.
So how can you fairly determine what your matrimonial home is worth? The best way is to work with a professional expert whom you both trust – ideally, a real estate agent. Of course, divorce can be emotional, and one or more parties may not feel confident about an agent’s ability to be unbiased in their evaluation.
When this happens, both of you can hire your own agents to evaluate the home independently and report their results. Using these two numbers, you can hopefully find some middle ground that works for everyone.
What About Common Law?
In today’s day and age, common law partnerships are becoming a lot more common. In terms of day-to-day life, common law relationships can look a lot like a marriage. However, from a legal perspective, they’re totally different.
You may be wondering, “Is my common law partner entitled to half my house?” or on the flip side, “my partner owns the house, what rights do I have?”
Navigating housing rights in common-law partnerships can be tricky, and plenty of legal intricacies often come into play. Here’s what you need to know first – in a common law relationship, both partners don’t automatically share equal rights to the home. This is particularly important to understand if one partner purchased the home independently before the other moved in.
So does that mean that one partner has full rights to the house in the event of a common law separation? Not exactly. Depending on the complexity of the situation, determining housing rights may require legal intervention. In any case, it’s a good idea to speak to a lawyer if you feel that you or your former partner is entitled to a share in the home.
Looking for insights related to property ownership in Ontario? Explore these related blogs next.
- Is There an Inheritance Tax in Canada?
- How to Transfer Property Title to a Family Member in Ontario
- How Long Does Probate Take in Ontario?
Is There a Cohabitation Agreement in Place?
Given how nuanced property rights can be in common law relationships, many partners choose to sign a cohabitation agreement when one person owns the house and another moves in.
However, in the event of a separation, it’s important to speak to a lawyer even if there is a cohabitation agreement in place. While these agreements are legally binding, they’re not 100% set in stone. Certain aspects can be adjusted or overruled by a judge if it’s determined that the terms of the agreement are not fair.
Wondering what your home’s market value may look like? I can help! Call 647.283.2127 or email me at stuart@stuartnodell.com to get in touch.
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