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Who Gets the House in a Divorce?

Who gets the house in a divorce?

When parties divorce, the splitting of assets is often a major issue. Often times, the largest asset the parties own is the matrimonial home. This begs the question, who gets the house in a divorce?

When two people marry, they essentially decide to join their proprietary interests. Regardless of which party’s name is on the title, which party made the down payment, or which party has been paying the mortgage, insurance, and taxes, both parties share equally in the home’s interest. Interest refers to the home’s monetary value, and thus this does not necessarily mean that both parties get the home. When a party gets the home, one may be referring to possession or ownership of the home.

Possession is having the right to live in and enjoy the property. Ownership refers to whose name is on the title. 

Essentially, there are three possibilities: (1) one party keeps possession of the home, while the other party’s name is on title (2) one party purchases the other party’s interest in the home, thus having both possession and ownership of the home, or (3) the home is sold and the parties split the net proceeds of sale. 

Possession, but no ownership

This is a temporary resolution. If one party fears the other or if living with one another becomes intolerable, the parties may decide that only one of them should have possession of the home. When spouses cannot agree who should leave the home, section 24 of the Family Law Act gives the court the power to grant one party exclusive possession of the matrimonial home. In making this temporary order, the court will consider:

  • The best interests of the children, and minimizing interference with the status quo;
  • Any existing orders under Part I of the Family Law Act (Family Property) and any existing support orders;
  • The financial position of the spouses;
  • Any written agreement between the parties;
  • The availability of other suitable and affordable accommodation; and
  • Any violence committed by a spouse against the other spouse or children.

Purchasing your ex’s interest in the home

The parties may agree that one party buys out the other party’s interest in the home, thereby transferring sole title to the buyer. The buyout can be in the form of an actual purchase, or the parties can adjust the splitting of other assets to meet the seller’s interest in the home.  

The party with the primary residence of the children will typically buy out the other party’s interest in the matrimonial home to maintain the status quo and ensure the continuity and stability of the children. 

The advantages of a buyout are avoiding the costs of selling a home or avoiding poor market conditions.

The disadvantages are that, in the long-term, the seller may lose out in the matrimonial home’s appreciation. Further, a court will not order a buyout, if one party does not consent to it. The buyout must be mutually agreed to between the parties.

Selling the home

If the parties do not agree to a buyout, the home will be sold and the parties will split the net proceeds of the sale. Parties typically mutually agree to a real estate agent and real estate lawyer and share the costs of selling the home.

It is important to note that the information above is relevant to married couples only. Those in common-law relationships may have to make a constructive trust claim if both parties’ names are not on title. 

 

Barry Nussbaum is Senior Lawyer at Nussbaum Law, a Toronto-based law firm dedicated exclusively to family law, with extensive experience in litigating cases in both the Superior Court and Ontario Court of Justice. The firm’s legal staff is committed to providing a personal approach to all clients and taking time to understand that each family situation is unique and has its own set of family values.