When a couple goes through a separation it may be assumed that the parties involved cease living together. Often, one spouse may stay in the home temporarily or permanently, while the other moves out. But settling the division of property in a separation or divorce could take years. What happens if during that time one spouse pays off the mortgage on the matrimonial home or benefits from an increase in its value? Is it fair for the other spouse to continue to pay rent while the other lives mortgage and rent-free? Such a question was recently put before the Ontario Superior Court of Justice.

Deciding to move out

The couple was married in 1985 and began experiencing difficulties in the marriage in 2000. The wife declared she wanted to separate in August 2009 while the couple was going through marriage counseling. She began looking for accommodations and moved out one year later in August 2010.

At the time the wife moved out, an equalization payment would only have amounted to less than $10,000. No action was taken to fix an equalization payment. The couple had two children when they separated. Their oldest, a son, was away at university. Their daughter was starting high school and split her time between her mother and father. The couple split costs for their children, including tuition, without obtaining a court order. The husband made less money than the wife, but paid for the house, including its mortgage and renovations, without asking for money from her. The wife also paid for many child-related expenses without seeking payment.

Seven years go by

Seven years passed without either party looking to solidify an equalization payment for the house. During this time the value of the house increased substantially. When the case went to trial in 2017 the husband sought to collect the wife’s share of maintenance and improvement costs. Meanwhile the wife countered with a claim of occupation rent against the husband. Her calculation of rent was $1,800 per month retroactive to the date of separation, which she calculated as seven years, totaling $78,000.

The husband and wife agreed that if occupation rent was owed, $1,800 would be the appropriate amount. They also agreed that the total would be $78,000. The issue before the court, however, was whether occupation rent should be paid at all.

The wife testified she did not want to live in the house. At the time of the separation the house was not finished, something which the wife testified may have contributed to her depression.

Determining a claim for occupation rent

The court turned to a recent decision from Ontario in order to review the factors a court should consider in a claim for occupation rent. They are:

  • The timing of the claim for occupation rent.
  • The duration of the occupancy.
  • The inability of the non-resident spouse to realize on her equity in the property.
  • Any reasonable credits to be set off against occupation rent, and
  • Any other competing claims in the litigation.
  • [230] The onus is on the claimant to satisfy the factors set out inGriffithsRebiere v. Rebiere.
  • [231] InHiggins v. Higgins (S.C.J.), the court expanded the list to include:
  • The conduct of the non-occupying spouse, including the failure to pay support.
  • The conduct of the occupying spouse, including the failure to pay support.
  • Delay in making the claim.
  • The extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home.
  • Whether the non-occupying spouse moved for the sale of the home and, if not, why not.
  • Whether the occupying spouse paid the mortgage and other carrying charges of the home.
  • Whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support.
  • Whether the occupying spouse has increased the selling value of the property.
  • Ouster is not required, as once was thought in some early decisions..

A 2001 decision from Alberta dealt with a delayed claim for occupation rent. In that case the court found husband had occupied the home for the purposes of providing for the children of the marriage. He made no claims for child support from the wife. The court stated “rarely, if ever should one spouse be able to bank a claim for occupation rent, and present that claim in capitalized form years later as part of a matrimonial property action.”

In reaching its decision the court looked to how the husband and wife behaved in the years leading up to the claims. Neither party considered the claims for seven years, both organizing their lives and finances independently. The court said the claim for occupation rent couldn’t be viewed in isolation to how the parties peaceably handled their obligations over the years. The husband did not ever seek money from the wife for the cost of the home, while the wife did not ever seek money for rent. Additionally, the wife was not compelled to leave; she simply didn’t like the house. The house also benefitted the couple’s daughter, who lived there both full-time and part-time over the years.

The court denied the claim for occupation rent as well as the husband’s claim for maintenance and improvements to the home.

What happens to a matrimonial home in the event of separation or divorce can be an emotion event. At Gelman & Associates, our experienced lawyers provide clients with the information they require to make educated decisions about the division or property. Please call us at 416-736-0200, toll-free at 1-844-736-0200, or reach us online to schedule a consultation today.