There are many difficult issues when couples divorce, and often the most emotionally charged asset they own is the marital home.
Usually, the house is purchased not only as a home, but also as an investment. Couples most commonly own the home as joint tenants. This means that they each have equal standing in terms of ownership, and as well, they have a right of survivorship in the event of the death of the other. The house becomes an asset however that must be split if the couple decides to separate.
There is a way that the marital home can be used to minimize the negative impact of a divorce on the children. Where there are sufficient financial resources, it is possible for a couple to purchase and maintain a second home.
After a divorce, the children will continue living in the family home, in a comfortable and familiar environment near their friends and their school, and the parents will alternate living with them.
To make this sort of arrangement work, not only would the couple need sufficient disposable income, but also more importantly a strong desire to share space and co-operate with the former spouse. It is a very rare situation.
When couples divorce, they often have to sell the home for financial reasons.
The Law of Property Act allows either joint tenant to ask the court for an order that the home be sold and the net proceeds equally divided. Although the other partner can sometimes delay the sale, such as until the end of the school year, it is usually not possible to prevent an order for sale.
The other option is that one spouse can purchase the equity in the home from the other partner. They can informally decide how much their equity is worth by obtaining an appraisal of the fair market value of the house and then deducting the outstanding debt against the home.
Often the most difficult roadblock in buying the other person’s interest is whether the purchasing spouse can obtain financing. A jointly owned home usually has a joint mortgage against it. The mortgagee would have to be willing to release one spouse from the mortgage. This is sometimes not financially possible if the purchasing spouse does not qualify.
Before a spouse makes a decision to try to keep the home, they will need to look at their long-term financial picture. Besides the cost of paying a mortgage, there are also taxes, maintenance, repairs and utilities which may be difficult when the person is now left with only one income.
In many separations, one spouse will continue to live in the home, sometimes even for years. The law allows that person to make a claim against the other spouse for a contribution toward the cost of the home such as taxes, repairs, insurance, etc.
The spouse who has left the home, however, is then entitled to make a claim for occupation rent.
This is basically rent for the remaining party to use their half of the house. Usually the spouses simply agree that one party will be responsible for the expenses for the home and the other party will not claim occupation rent.
» Jodi Wyman is a lawyer with Paterson, Patterson, Wyman and Abel, with offices in Brandon, Neepawa and Virden.
Republished from the Brandon Sun print edition May 12, 2012