Do Separated Spouses Split Their Matrimonial Home 50/50 (equally)?

When married couples separate in Ontario, the home (or homes – there can be more than one) that they live in on the day they separate gets special treatment in the property “equalization” process. Those special rules may make it seem that matrimonial homes are divided “50/50”, but that is not actually how it works.

The property division provisions of Ontario’s Family Law Act do not give married people any right of ownership over their spouses’ property or other assets. If the title to the matrimonial home is in your name, it stays in your name, subject to some claims your spouse can make if he or she makes significant contributions to that property. Just being married does not mean spouses both own their home (or homes). Watch the video below for more details on how Ontario Law divides the value of property, not the property itself, on separation. 

Also, note that economic downturns represent an opportunity for some spouses to take advantage and get more than their usual share, but the same principles apply to all economic downturns.

There are a number of special rights that attach to matrimonial homes (or homes). One is that neither spouse can kick the other out of matrimonial home, or secure debt against a matrimonial home, without the other spouse’s consent or a court order. 

The reason people think they share the equity in matrimonial homes 50/50 is that absent a marriage contract, the entire equity in a matrimonial home is always included in the value of assets that married spouses share. With almost every other type of asset, spouses only share in the growth in the value during the marriage. However, section 5(2) of the Family Law Act does not allow a spouse to get any credit for bringing a property into the marriage if that property was a matrimonial home on the date of separation. So, without a marriage contract, spouses share whatever value is in their matrimonial homes. 

Spouses do not necessarily have to give their spouses “half the house” on separation. That spouse is entitled to stay in the house, and to have the equity included in the property division, but, if a home is not jointly owned, there is no right to “half of it”. It is just included in the assets to be divided. So, if the spouse who does not own the matrimonial home has lots of savings or a pension to include in his or her assets to be divided, that may offset the value of the matrimonial home. If the spouse who owns the matrimonial home had a lot of assets (other than the matrimonial home) on the date of marriage, his or her increases in net worth may be less than the other spouse, which would mean the home would not be divided. The same may also be true if the spouse who owns the matrimonial home has a lot of debt on separation and may not have the increase in net worth that is necessary to owe the other spouse anything.

But, in short-term marriages, there is a real danger that a spouse can walk away from being entitled to half the other spouse’s home. If the marriage was short, the couple may still live in the same house that one spouse brought into the marriage. In that case, the spouse with the house has to share half the value of the house because there were almost no changes in each spouse’s financial situation and so nothing to offset the value in the matrimonial home when the spouse’s “Net Family Properties” are “equalized.”

Note that the special rights for matrimonial homes only apply between two spouses. Those rights regarding matrimonial homes do not apply to third parties, such as in-laws, landlords, business partners, or friends. A spouse has no right under Family Law to stay in a home owned by his or her in-laws or another landlord. You certainly do not become entitled to “half” of a matrimonial home that neither spouse owns. People who think they should have rights with respect to a property that is not owned by them or their spouse should speak to a lawyer to see if any other type of law might help. 

Before or after a marriage, spouses should never assume that the matrimonial home will just be divided 50/50 until they have each spoken to a lawyer to figure out how Ontario Family Law will work in their family’s situation. This is an area where making a mistake can cost hundreds of thousands of dollars. There may be things a lawyer can do to make things fairer – especially before a separation. But even after separation, there may be a possibility of making tricky legal arguments to adjust how property is divided either pursuant to section 5(6) of the Family Law Act or the Principles of Equity. 

When the matrimonial home increases or decreases in value a lot during separation, there can be issues about whether the sharing of the value of the matrimonial home under the Family Law Act remains fair. There can also be an issue of whether that division remains fair in light of the work or financial contributions that each spouse has put into the home. The video below goes over the considerations and why it can be important to speak to a Family Law Lawyer if you do not feel you are getting a fair share of the matrimonial home. 

John Schuman Guide to the Basics of Ontario Family Law book cover

You can get a lot more information about Ontario Family Law issues, including a comprehensive explanation of parenting cases (parenting time and decision making), child support, spousal support, property division, and most other common family law issues by downloading this $9.99 Kindle eBook, Kobo eBook, or iBook for your iPad or iPhone or ordering it from Amazon as a paperback. But to understand how the law works precisely in your situation, it is always best to speak to a good Family Law Lawyer.

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