![\"\"](\"https:\/\/www.livabl.com\/articles\/wp-content\/uploads\/2019\/06\/what-happens-to-the-house-in-a-divorce-10.jpg\")
<\/a>Photo:\u00a0Gabby Orcutt<\/a>\u00a0on\u00a0Unsplash<\/a><\/em><\/p>\nSo, who gets what in a divorce?<\/h2>\n
Across Canada, each province and territory has slightly different laws<\/a> for handling the division of property. But here\u2019s the gist: under Canada\u2019s constitution, a marriage is an equal partnership. It makes no difference if you\u2019re responsible for running the household, earning the family income, or a blend of both \u2014 your contributions are considered equal. While it varies from province to province, this sentiment is echoed throughout the division of property.<\/p>\n \u201cThe law has developed significantly over the last 50 years or so. It\u2019s begun to give weight to the non-financial contributions to a partnership,\u201d says Paris. If mom or dad decide to stay home with the kids, they are sacrificing potential career\/financial advancements and mitigating costs for the family (child care, for example).<\/p>\n\n \u201cThere are so many factors to consider,\u201d says Paris. \u201cYou\u2019re not just looking at what people are financially contributing but also what they might be losing. If someone has now sacrificed their career, they\u2019re leaving the marriage without having accumulated as many sole assets because they were focused on the home, the kids, the domestic duties. They didn\u2019t get a career of their own, they don\u2019t have a retirement plan, so you look at it in that sense because those sacrifices do have a monetary value, at the end of the day. That\u2019s what the court is doing \u2014 they\u2019re putting value on those types of contributions.\u201d<\/p>\n In Ontario, your spouse is entitled to half of the \u2018matrimonial home,\u2019 regardless of whether you purchased it before marriage. \u201cA home gets the distinction of being a matrimonial home if it’s the property that you’re living in, at the date of separation,\u201d says Paris. Both spouses also have equal rights to remain in the house, regardless of who has their name of the papers.<\/p>\n If you owned property in addition to the matrimonial home prior to the marriage, you receive the full value of the home, before the date of marriage. \u201cLet\u2019s say you had an investment property and at the date of marriage it was worth $300,000 (with no mortgage on it for simplicity purposes),\u201d says Paris. \u201cNow, you\u2019re leaving the marriage and the property has increased to $700,000. The amount that ends up being divisible is only the increase in value \u2014 $400,000. You will get the benefit of $300,000, which is deducted from your total net family property. This is essentially a calculation of what your net worth is at the time of separation.\u201d<\/p>\n With common-law couples, it\u2019s a little different. In Canada, you\u2019re considered common-law when you\u2019ve lived with your partner for three years, or sooner if you have a child together. In this case,\u00a0property is divided based on ownership \u2014 so\u00a0if you brought property into the relationship, it remains your own.\u00a0If you purchased the home together\u00a0with joint title,\u00a0the property will be divided equally.\u00a0 If one spouse believes to have contributed more significantly to the asset, common law parties\u2019 have the ability to advance trust claims, to accurately reflect the actual contributions by each party to the asset.\u00a0\u00a0Paris warns that this process can easily become complicated and costly. \u201cTrust claims happen to be more expensive because there\u2019s a lot of evidence you need to put forward to prove it,\u201d says Paris.<\/p>\n Couples can sign a marriage contract or cohabitation agreement (if you\u2019re common law) that details who gets what and who would be responsible for outstanding debts if the relationship ends. These are legal documents that hold up in court, assuming they were executed properly. They must be completed with an attorney \u2014 promises on a cocktail napkin won\u2019t do much for you.<\/p>\n You have the same rights to the property whether or not you continue to live there at the time of the separation. It\u2019s a common misconception that you have to stay in an unhappy living situation \u2014 potentially enduring abusive or high conflict situations \u2014 to get your share.<\/p>\n \u201cYou don\u2019t need to continue living in the house to maintain your rights to the property,\u201d says Paris. \u201cUsually the divorce is the last step in any sort of matrimonial proceedings. All of the rights with respect to The Family Law Act start at the date of separation. There doesn\u2019t have to be a formal divorce in order for you to start moving forward with splitting up the assets. We recommend it being a last step and the courts prefer that as well.\u201d<\/p>\n However, if you leave the matrimonial home and stop contributing to carrying costs like property tax, mortgage payments and property insurance, there will be an adjustment to whatever amount you\u2019re owed.<\/p>\n \u201cIf it\u2019s a jointly owned property, typically you\u2019re going to get the value of the home until the day that it\u2019s sold or until the day that title is switched, subject to post-separation adjustments if you stop contributing to it,\u201d says Paris.<\/p>\n Selling the home you shared can be a loaded emotional experience and it can be difficult to untangle yourself from the place you once called home. But in Paris\u2019 experience, it\u2019s important to be realistic about what you can afford before making this choice. If the house is your primary asset, you\u2019re probably going to have to sell. \u201cUnless you have access to money via relatives or another source to buy out the property, you should probably accept that fact early on,\u201d says Paris. \u201cYou have to accept, to a certain extent, that your assets are going to get hit because they\u2019re being divided, and as a result, the lifestyle you once had may not be sustainable as a \u2018single\u2019 person.\u201d<\/p>\n You\u2019re legally not allowed to sell, rent or mortgage the family home without the other spouse agreeing to it (unless you get a court order). \u201cIt doesn\u2019t necessarily have to be a joint property. When you have a spouse, there\u2019s a line on any agreement of any purchase and sale that the spouse also has to consent to the sale of the property,\u201d says Paris.<\/p>\n Some parents will fight for the house for their kids, who have acclimated to a specific neighbourhood, school and community. \u201cIt is possible that a court can order something called exclusive possession, which would give one party possession of the home until more or less the conclusion of the proceedings, and such orders are typically given if it is found to be in the best interest of the children,\u201d says Paris.<\/p>\n Selling a home doesn\u2019t have to be complicated. If you both agree to the sale, you won\u2019t need to get a family lawyer involved. Although, a real estate lawyer has to be present at the closing of any real estate transaction, regardless of your marital status.<\/p>\n \u201cIf you have to get lawyers involved at that point in order to consent to the sale, it\u2019s usually because one person is disputing it and the other person wants it sold,\u201d says Paris. \u201cIn the event of a dispute over the terms of the sale of the home, they can be negotiated with family council, and the transaction would be completed by a real estate lawyer.\u201d<\/p>\n If you need to break your mortgage with your current lender, be prepared for significant fees that can easily climb north of thousands of dollars. Ask your lender if there is a prepayment penalty, an administration fee, appraisal fee, reinvestment fee and more. If you have a variable mortgage, you will need to pay three months\u2019 interest to break the mortgage. With a fixed-rate mortgage, the penalty is unconscionably larger: three months\u2019 interest or the interest rate differential (whichever is greater). To recoup some costs, it\u2019s typical for the spouse who decides to stay to refinance the mortgage to come up with the funds.<\/p>\n Your lender will also need you to requalify for the mortgage on a single income. If this isn\u2019t possible, you can try to find a guarantor or co-signer. Your lender may also ask you to provide a separation agreement if you have one and the amount you pay for child and\/or spousal support.<\/p>\n If your ex decides to take over the mortgage, it\u2019s advisable to remove yourself from the mortgage completely. This is because you will continue to be legally responsible for payments. If your ex fails to pay or something happens to them, you\u2019re on the hook.<\/p>\n The short answer is, it depends. Paris explains the costs generally grow when people don\u2019t want to accept what the law is.<\/p>\n \u201cIt really depends on the complexity of the matter, the types of claims that you\u2019re making, and the willingness of both parties to accept the law or try to negotiate,\u201d says Paris. When you and your spouse are on the same page and have done the negotiating in advance, you can mitigate costs significantly. \u201cYou already have everything negotiated and a clear plan of action. In those circumstances, it\u2019s just a matter of drafting something up, reviewing it and you\u2019re out the door. You can do that potentially within $5,000, assuming there isn\u2019t much back and forth but it\u2019s hard to put any dollar value on that,\u201d explains Paris.<\/p>\n If you have a lot of negotiating to do, your best course of action is to find a good lawyer and listen to them. \u201cThe reality is, if you can\u2019t figure it out, the court is going to order that the house is sold,\u201d says Paris. \u201cA lot of people are going to want to fight that battle, contrary to the advice of their lawyers. To mitigate your losses, my advice is to listen to what your lawyer has to say. Because the court doesn\u2019t care about the sentimental value of a house.\u201d<\/p>\n<\/a>Photo:\u00a0A. L.<\/a>\u00a0on\u00a0Unsplash<\/a><\/em><\/p>\nWhat if you\u2019re common law and decide to end your relationship?<\/h2>\n
<\/a>Photo: James Bombales<\/em><\/p>\nIf you leave the home before the divorce is filed, will you lose it?<\/h2>\n
<\/a>Photo: James Bombales\u00a0<\/em><\/p>\nWhat if one partner wants to stay and the other wants to sell?<\/h2>\n
<\/a>Photo: James Bombales\u00a0<\/em><\/p>\nWhat happens to my mortgage if I want to sell or stay?<\/h2>\n
<\/a>Photo:\u00a0Kelly Sikkema<\/a>\u00a0on\u00a0Unsplash<\/a><\/em><\/p>\nHow much does a divorce cost when property is involved?<\/h2>\n