What happens when one spouse remains in the matrimonial home?

What happens when one spouse remains in the matrimonial home?

This is a summary of a paper titled, “Your Spouse Is Not a Squatter: How to Effectively Apply Principles of Occupation Rent,” prepared by Fadwa Yehia of Jamal Family Law Professional Corporation for the Law Society of Ontario’s Six-Minute Family Law Lawyer 2018. The summary was prepared by Luke’s Place articling student Kevin Chao.

As the title of the paper suggests, when one spouse acquires exclusive possession of a jointly owned home, the non-occupying spouse may be disgruntled and feel that their ex-partner is akin to a squatter; that is, “an individual who occupies land or residence that they do not own or rent or generally have lawful permission to use”, as defined in Black’s Law Dictionary. Sections 19 and 24 of the Family Law Act state that both spouses have an equal right to possess their matrimonial home regardless of ownership, meaning that the occupying spouse is not a squatter. However, a non-occupying spouse can still pursue balancing the perceived financial inequality through occupation rent.

Legislation

The remedy of occupation rent is not an automatic right, but is available as “periodic payments” under the Family Law Act and the Courts of Justice Act, as well as at common law, when reasonable and equitable. Section 24(1)(c) of the Family Law Act states, “Regardless of the ownership of a matrimonial home and its contents, and despite section 19 (spouse’s right of possession), the court may on application, by order… direct a spouse to whom exclusive possession of the matrimonial home is given to make periodic payments to the other spouse.” Even when there has not been a previous order for exclusive possession, occupation rent may be available at common law where one joint tenant spouse is entitled to compensation under section 122 of the Courts of Justice Act.

The Principle of Ouster

Generally, a joint tenant may not sue for use and occupation unless ousted by their co-tenant. Because co-tenants do not have a contractual or landlord-tenant relationship, the right to recover for use and occupation can only be remedied by way of damages upon being ejected. However, courts will consider the circumstances giving rise to exclusive possession, such as if the non-occupying spouse was forced out by the other spouse, or if they left voluntarily or had no other choice.

Factors to Consider

The Court will consider all circumstances when determining if it is reasonable to award occupation rent, and factors such as the parties’ financial means could prohibit or limit the award. Primary factors to consider when making a claim for occupation rent include:

  • The timing of the claim for occupation rent (specifically if the party delayed making a claim)
  • The duration of the occupancy
  • Any reasonable credits to be set off against the occupation rent
  • Any other competing claims in the litigation

Other considerations could include the conduct of either spouse or a failure to pay support, if the occupying spouse has increased the selling value of the property, and the extent to which the non-occupying spouse has been prevented from accessing their equity.

Some promising news is that, “increasingly Courts have considered whether the non-occupying spouse seeking occupation rent committed acts of violence against the spouse or the children of the party with exclusive possession.” It is up to the trial judge to weigh all of these factors to ensure an equitable, reasonable decision.

Calculation of Occupation Rent and Tips to Consider Before Advancing a Claim

When one spouse is occupying the matrimonial home prior to its sale, a claim for contribution to the expenses of the matrimonial home should allow for occupation rent. Competing claims could cause a set-off, resulting in a wash or adjustment. Stetco v. Stetco resulted in a set-off that was upheld by the Court of Appeal as appropriate, and Irrsack v. Irrsack is a decision dating back to 1978 that supports the equitable approach to the calculation of occupation rent.

The calculation allows the party claiming occupation rent their one-half rent that the premises would attract, less half the taxes, insurance, and mortgage that should be credited for the determined period.

When someone is considering a claim for occupation rent as relief, they should examine the legal foundation for the claim and the fact-specific circumstances as discussed above. In addition, they should make sure to claim occupation rent as part of their pleadings, consider their financial circumstances and ability to pay support, appraise or otherwise assess the market value for the home and rent for the home, and collect any documentary evidence regarding the carrying costs by both parties related to the home, or request such evidence as part of disclosure.

 

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