When married couples separate, the home that they live in on the date of separation is the ‘matrimonial home’. Married couples can have more than one matrimonial home. A cottage may qualify as a matrimonial home in addition to the parties’ main residence.
Some parties think that a matrimonial home means that the home will be considered jointly owned by the parties. This is not the case. Legal ownership will be determined by how title to the home is registered (subject to possible resulting or constructive trust claims). This means, if title to the matrimonial home is registered in one party’s name, then the home belongs to that person.
Knowing what is and what is not a matrimonial home is important because certain rights and responsibilities flow from a house being a matrimonial home. If a matrimonial home is owned on the date of marriage, the owner will not be permitted to deduct the date of marriage value from his/her net family property. This will have the effect of increasing that party’s net family property and will impact the equalization payment.
It is important to note that where a gift or inheritance becomes the matrimonial home or can be traced into the matrimonial home, you cannot exclude it from your net family property. Under the Family Law Act, inherited property and money can be excluded from a party’s net family property if the person can show that the property or money was received as a gift or inheritance. However, a party loses the right to exclude a gift or inheritance if it becomes or is used for the matrimonial home. For example, if a party receives an inheritance of $200,000 and that person deposits into a bank account (even a joint account), that person will not have to include the $200,000 in their net family property if the funds still exist on the date of separation. However, if that same inheritance was used to pay off a mortgage of a matrimonial home, the party does not get to exclude the $200,000 from their net family property.
If the gifted or inherited property can be identified and traced into property that exists at marriage breakdown (other than a matrimonial home), it is excluded. If the donor or testator expressly stated that income from a gift or a bequest is to be excluded, it will also be excluded if it can be identified and traced. It is important to note that where the gift or inheritance becomes the matrimonial home or can be traced into the matrimonial home, it is no longer excluded.
If a spouse comes into the marriage with a home that is also the matrimonial home at the valuation date, neither the home nor any debts or liabilities owing at the date of marriage that are directly related to the acquisition of or significant improvement to the home are included in the calculation of the date of marriage value. The treatment of the matrimonial home at the date of marriage is unique in the Family Law Act.
A matrimonial home also has specific rules about possession. Both parties have a right under Part II of the Family Law Act to possess a matrimonial home. This means that neither party, regardless of who is on title, can kick the other person out of the house or change the locks on the home. To exclude a person from a matrimonial home, a party will need a court order. A court has the power to grant exclusive possession of a matrimonial home, both on a temporary and permanent basis, to either spouse including a non-owning spouse. Exclusive possession means that one party is permitted to live in the house and the other party may not live in the house. Exclusive possession can only be granted to married spouses. Therefore, if a party consents to a divorce and that party is not a registered owner of the matrimonial home, they will lose their right to live in the matrimonial home.