Your "Matrimonial Home" Is Treated Differently

The matrimonial home is subject to special rules.

This is the first in a three part series on matrimonial homes.  This series will provide information on (1) what a matrimonial home is, (2) how a matrimonial home is treated in the equalization process, and (3) exclusive possession of a matrimonial home.

What is a matrimonial home?

The Family Law Act defines the matrimonial home as:

Every property in which a person has an 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.

This may include your primary residence, a cottage, and other properties.  Unlike a “primary residence” under tax rules, it is possible to have more than one “matrimonial home” if there is more than one property you “ordinarily occupy”.

If the residence is located on a large property, such as a farm, it is possible that only the home and a portion of the land will be designated as a matrimonial home, with the balance of the land being treated as a separate asset for the purposes of family law.

Being aware that a property may be a matrimonial home, and defining whether a property is a matrimonial home, can be a very important issue as there are special rights and rules around a matrimonial home.

How is a matrimonial home treated differently?

Firstly, both spouses have an equal right to possession of a matrimonial home.  This means that upon separation, both parties have an equal right to live there.  This applies even if one spouse is not listed on title.

Secondly, a spouse can apply for “exclusive possession” of the matrimonial home upon separation.  This means that he/she would be allowed to live there to the exclusion of the other person, despite that person’s equal right to possession.  A person can apply for exclusive possession even if their name is not listed on title.  More information on exclusive possession is available in this post.

Thirdly, there are special rules about selling and financing a matrimonial home.  The Family Law Act states in s. 21:

No spouse shall dispose of or encumber an interest in a matrimonial home unless,
(a) the other spouse joins in the instrument or consents to the transaction;
(b) the other spouse has released all rights under this Part by a separation agreement;
(c) a court order has authorized the transaction or has released the property from the application of this Part; or
(d) the property is not designated by both spouses as a matrimonial home and a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled.

This means that if a property is a matrimonial home, you cannot sell or transfer the home, or refinance it or place any other liens on it, without your spouse’s consent.  Once again, this applies regardless of whether or not your spouse’s name is on title.  This may continue long after your separation if you do not obtain a separation agreement or divorce, so it is very important to ensure the appropriate actions are taken after a separation or you may face difficulties when you want to sell or remortgage your home years later.

Lastly, a matrimonial home can be treated differently than other property upon a separation when the parties are dividing their property.  This can make a significant difference in the equalization payment one party owes to the other.