Matrimonial Home Designations in Ontario
There is an opportunity under the Family Law Act to designate a home as a "matrimonial home".
You might think that married couples would wish to avail themselves of this opportunity. However, it's rarely used. In fact, no one bothers.
The reason is rather simple. If a property is not designated then third parties will presume that it is a matrimonial home. The consent of both parties will be required. The third party purchaser or mortgagee will not want to take a chance.
So, here are some of the rules that apply:
· A designation means that the property is a family residence
· There can be more than one property designated
· If both parties designate a property (or more than one) then all other properties that are not so designated will be deemed not to be matrimonial homes
Essentially, this means that the designation provisions are helpful to lawyers when a couple who are negotiating a separation agreement of divorce settlement need to dispose of one of their properties. When times are good, the designation is not particularly helpful since it only compromises matters later.
However, not all parties can be trusted. And, this is the second and perhaps most important reason for designating a home as a “matrimonial home”.
Assuming that Bob has title to the house in his own name, and he is now separated from Mary, most of the time third parties will not undertake business with Bob alone. Mary’s consent on the listing, the agreement of purchase and sale and the conveyancing documents will be required.
But, what if Bob is a “rogue”? He fails to disclose Mary’s interest to his sales agent, and his lawyer. He might say that he was never married, or that Mary’s consent is not required because she has settled matters and “signed off”.
In that case, the innocent purchaser or mortgagee obtains title without being subject to Mary’s interest. They get it free and clear. Naturally, this is wrong in fact, but they have documents in their file all saying that Mary’s consent is not required, and the only person who signed them was Bob.
So, if Mary believes that Bob is a rogue, then she should immediately instruct her solicitor to register such a designation on title. If this precaution were taken, then the purchaser and the mortgagee would take title subject to Mary’s interest. At the very least, it forces Bob to deal with Mary’s interest honourably in the circumstances.
All too often, spouses in Mary’s position find out far too late that the property has been sold and that Bob has left the country.
Brian Madigan LL.B., Broker is a Manager at RE/MAX West Realty Inc., Brokerage 416-745-2300.