WELCOMING THE NEW YEAR

WELCOMING THE NEW YEAR

With the backdrop of the COVID19 pandemic and all its woes I hope we can start 2021 with new possibilities. This could include buying a new home, furthering your education, travelling, focusing on health and wellness, or even anticipating a separation. That been said,  going through a separation requires legal counsel.

Why legal counsel is needed for a separation:

Legal counsel  is needed to ensure that the assets acquired in the relationship are distributed fairly among both parties. Often times one of biggest asset own is the matrimonial home, and at the time of separation both parties should know their rights. Hence, we will be discussing the rights of the party who is non-titled spouse during a separation.

Definition of the matrimonial home of Party who is not on title

The matrimonial home is defined by the Family Act “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.” Given the special status of the matrimonial home under s. 19 of the Family law act both spouses have an equal right to possession of the of a matrimonial home. When only one spouse has an interest in a matrimonial home, the other spouse right of possession and this end when they cease to be spouses (divorce), unless a separation agreement or court order provides otherwise.

Rights of a non-title spouse

In situations where a party is non-title spouse on the matrimonial home, they also have rights and entitlement to the home. In the case of Rawluk v. Rawluk, [1990] 1 S.C.R. 70, [1990] S.C.J. No. 4, the Supreme Court explained the a non-titled spouse entitlement and rights to the home. The distinction between a share in ownership and a share in property value through an equalizing transfer of money is more than an exercise in judicial formalism. 

This distinction not only follows the two-step structure of the Family Law Act, 1986 but reflects conceptual and practical differences between ownership and equalization. Ownership encompasses far more than a mere share in the value of property. It includes additional legal rights, elements of control and increased legal responsibilities. In addition, it may well provide psychological benefits derived from pride of ownership. Where the property at issue is one to which only one spouse has contributed, it is appropriate that the other spouse receive only an equalizing transfer of money. But where both spouses have contributed to the acquisition or maintenance of the property, the spouse who does not hold legal title should be able to claim an interest in that property by way of a constructive trust and realize the benefits that ownership may provide. 

The imposition of a constructive trust recognizes that the titled spouse is holding property that has been acquired, at least in part, through the money or effort of another. The non-titled spouse's constructive trust interest in this property is distinct from the right to an equalizing share of property value that is derived not from an independent property right but from the status as a married person. 

As outlined in the case Rawluk v. Rawluk as the non-titled spouse you are entitled to the equalizing of the net family property. For example, of the total value of the matrimonial home will be attributed to the party whose name is on the title. Upon equalization, the non-titled spouse is entitled to 50% of net worth from the date of marriage to date to valuation date. If the home net worth of the home is $100,000 (after the mortgage is deducted), upon equalization, both parties will be entitled to $50,000 of net worth. 

In addition to the equalization claim, the case law dictates that although titled spouse contribution to the home despite being on title allows non-titled spouse to claim an interest in the property by constructive trust and realize the benefits that ownership may provide. 

In conclusion, the non-titled spouse, have the right to claim an equalization of the net family property of titled spouse which includes the matrimonial home. In addition, the non-titled spouse has a right to claim an interest to the matrimonial home by way of constructive trust. Since non-title spouse contribute equally the upkeep of the home. Although technically non-titled spouse is not on title this does not preclude from the matrimonial home. 

We at Heckburnlaw are here to support you during this time by providing the best options …give us a call