As family lawyers, we know that one of the biggest assets you will accumulate throughout your life is your home. For couples, one person may come into the relationship with a home that the other moves in to. In other circumstances, a couple may choose to buy a home together. A separation can have a big impact on home ownership, and it is important to be aware of what these implications may be upon separation.
Splitting the matrimonial home
If a couple is married, a home is presumptively considered matrimonial property under the Matrimonial Property Act. As such, it is subject to division upon separation.
When a common-law couple purchases a home together, and both parties are named on title to the home, this too will require division upon separation.
When only one person is named on title to the home in a common-law relationship, a division of the home becomes trickier. There is no presumption of division and an individual must rely on the principles of “unjust enrichment” to obtain a share of the home.
How to split assets in a divorce
Regardless of the situation you find yourself in, if you, or your partner, are making a claim to a home that was shared during the relationship, there are several important factors to consider. The most important consideration will be whether you and your former partner intend to sell the home, or if one will “buy out” the other.
If you have decided that one person will buy out the other, do you agree on the valuation of the home? If not, it is likely that an appraisal will be required to determine the value. An appraisal will be completed by a trained professional, and oftentimes results in a report being provided to you explaining how the valuation was calculated.
After the valuation is determined, we deduct “deemed” disposition costs of the property. These costs include the costs that would be associated with the sale of the house, if the house was listed for sale. It also includes the legal fees that would be paid upon the sale of the house.
Finally, the balance of the mortgage is further deducted to determine the equity remaining in the home. This is generally the amount that can be divided between the parties. As indicated above, depending on your circumstances, this does not always result in a 50/50 division.
In a real estate market as hot as the Halifax Regional Municipality is currently experiencing, some separating couples may choose to sell their property to maximize their investment. To do so, the parties must work cooperatively to select a real estate agent, and to come to a consensus on all decisions that must be made regarding the sale of the home (sale price, accepting offers, etc.).
Our experienced lawyers here at Lenehan Musgrave can help you navigate what to do with your home post-separation. Whether you are married or common-law, it will be important for you to obtain professional advice as to how to get the best return on one of the biggest assets you will own. Contact our family lawyers today or book your initial consultation.
