iStock_000004886744_LargeOne of the key assets in any marriage is the matrimonial home. It is where the spouses have lived together and often raised their family; it can be full of both good and bad memories, and for some spouses it can have an emotional value to them way out of accord with its actual monetary value. This can lead, in turn, to spouses refusing to list and sell jointly owned matrimonial homes or refusing to agree to sell their half or buy the other spouses half of the house from the other, often because they emotionally can’t give it up. Spouses can attempt to hold on to the matrimonial home, but unfortunately for them, when the matrimonial home is jointly owned legislation provides the courts in Ontario with a means to force the listing and sale of the matrimonial home.
In situations where the matrimonial home is owned jointly, it must be remembered that both spouses have a right to possess it both during marriage as well as after separation, and neither spouse has to sell their half of the ownership. Spouses do not have a right of first refusal to purchase the matrimonial home from the other where it is jointly owned. In fact, in Ontario the Partition Act provides the courts with the power to force the sale of a jointly owned matrimonial home, if the parties can not come to an agreement on the one buying the other out. Spouses are entitled to list the matrimonial home on the market in an effort to receive the highest sales price for it, and are not required to accept less than the price that the market will bear from their spouse.
It must be remembered that the Partition Act is only available in situations of joint ownership. Where the title to the matrimonial home is in the name of only one of the spouses, then the Partition Act does not apply. This does not mean that the other spouse has no claim against the matrimonial home. The non-titled spouse still has a claim to the equity from the property through the equalization process provided for under the Family Law Act, and may have equitable trust claims against it as well. However, title counts, and in this case, the non-titled spouse can not force the titled spouse to sell the matrimonial home, or limit the ability of the titled spouse to keep it, sell it, refinance it or even make a gift of it.
For spouses who jointly own the matrimonial home, it is very important that they think long and hard and early in the process as to whether they can reasonably can afford to buy their spouse out of the matrimonial home, carry the costs of that purchase and the regular monthly costs, or whether it would be best for them instead, to sell out their interest to their spouse, or agree to list the matrimonial home for sale as quickly as possible and attempt to get the highest price. While the matrimonial home may be full of memories, it must be remembered that the courts will focus only on the real property value of the matrimonial home and the right of the other spouse to maximize their return from it; it will put no stock in the value of emotions, and will be unmoved by such concerns. As well, it should be remembered that if a spouse should seek to buy out the interest of the other in the matrimonial home, then in a sense, they have made it a valuable hostage to be exploited by the other spouse, who might seek to gain concessions in return for agreeing to sell the house to the spouse who wants it. The spouse who wants it might say it is worth it, and may give a number of reasons, such as wanting to keep the children in the neighbourhood that they have grown up in; and at a basic human level, those are good reasons. But that spouse should not be surprised when their desire to keep the house is seen as an advantage to the other spouse to be exploited.

 

Written by Mervyn White. A family law lawyer at Galbraith Family Law. To see Merv’s bio click here. If you wish to book a consultation with Mervyn please go to our website.