If you are going through a separation, one of the issues you may have to consider is whether you or your spouse may owe the other occupation rent if one of you stays in a jointly owned matrimonial home.
Section 24(1)(c) of the Family Law Act, R.S.O. 1990, c. F.3 provides that if one spouse is given exclusive possession of the matrimonial home, the court may order that person to make payments to the other spouse. Those payments are also known as “occupation rent”. Section 24(1)(c) reads as follows:
24. (1) 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,
(c) direct a spouse to whom exclusive possession of the matrimonial home is given to make periodic payments to the other spouse;
In addition to the remedy under s. 24 of the Family Law Act, it is within a court’s inherent power to grant occupation rent as an equitable remedy if circumstances of unjust enrichment are present, even if neither party have been granted exclusive possession of the matrimonial home. In order to successfully claim occupation rent as an equitable remedy, it must be demonstrated that the person in possession of the home has been enriched and that there has been a corresponding deprivation suffered by the other person entitled to the property in the absence of a juristic reason for the enrichment.
How do Courts Determine Whether to Allow an Application for Occupation Rent?
In Higgins v. Higgins, Justice Quinn of the Ontario Superior Court of Justice articulated the following as relevant considerations when determining the appropriateness of an order for occupation rent:
(a) the conduct of the non-occupying spouse, including the failure to pay support;
(b) the conduct of the occupying spouse, including the failure to pay support;
(c) delay in making the claim;
(d) the extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;
(e) whether the non-occupying spouse moved for the sale of the home and, if not, why not;
(f) whether the occupying spouse paid the mortgage and other carrying charges of the home;
(g) whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;
(h) whether the occupying spouse has increased the selling value of the property;
(i) ouster is not required, as once was thought in some early decisions.
Successful vs. Unsuccessful Applications for Occupation Rent – Examples:
Successful: In Balsmeier v. Balsmeier, the wife was granted temporary exclusive possession of a “matrimonial home” condominium in Florida. She benefited from her occupation of the condominium for almost two years. The husband paid the carrying costs of the condominium throughout. The market value rent for the condo was $6,750 USD per month. The husband advanced an occupation rent claim (one year’s worth of rent), and was successful. The husband was awarded foregone rent in the amount of $48,000 USD (half of $6,750 x 12 months).
Unsuccessful: In Withers v. Withers, the wife left the matrimonial home on the advice of her therapist, and she was not allowed access to her personal items in the home. The husband stayed in the matrimonial home. For two years she lived rent-free with her family and then purchased a condominium with inheritance money. The husband assumed all taxes, insurance, and utility expenses in the home. There were no mortgage payments. The wife was denied occupation rent in this case as the Court found that the circumstances of the case were not exceptional.
Will You or Your Spouse Owe Occupation Rent?
If you or your spouse have been granted exclusive possession of your matrimonial home, or you think circumstances of unjust enrichment exist in your case, occupation rent may be payable to or by your spouse. Contact Gelman & Associates for advice on the issue of occupation rent, or any family law matter. Call Gelman & Associates at (416) 736-0200 or 1-844-742-0200 or contact us online for a confidential initial consultation.