The topic of real estate often intersects with family law and, as not all family law lawyers practice real estate (or have a friend to call that does), this article strives to summarize some notable points.
Spousal Consent
Per section 18(1) of the Family Law Act, a Matrimonial Home is defined as every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence.
For married couples, when a Matrimonial Home is listed for sale or a mortgage is being registered on the property, spousal consent is required, whether or not the spouse appears on title of the Home. In the event that such consent is not obtained, the real estate agent or the real estate lawyer will be unable to proceed with the transaction.
If the parties are not married and one party owns a property, the consent of the other party is not required to sell or mortgage the property.
Matrimonial Home Designations
When only one party appears on title of the Matrimonial Home, and the non-titled spouse is concerned that the titled spouse may try to act without obtaining the property consents listed above, the non-titled spouse can register a “Matrimonial Home designation” on title through the land registry system. This designation serves to notify potential purchasers and/or lenders that the transaction could be set aside if no spousal consent is obtained. A spouse can register such designation with the assistance of a real estate lawyer without notifying the titled spouse.
A Matrimonial Home designation can be removed either voluntarily by the person who registered or by order of the court. For so long as the designation exists on title, no transactions can proceed without the proper consent of the non-titled spouse.
Joint Tenancy and Death
There are two ways for people to hold title to real estate, namely as joint tenants with the right of survivorship or as tenants in common. The primary difference is that when parties hold title as joint tenants with the right of survivorship, if one party predeceases, title to the property can be transferred by way of a survivorship application and without the need to probate the whole estate. This often saves a significant amount of legal fees and estate administration tax.
In order to preserve the rights of a non-titled spouse in the event that a Matrimonial Home is owned jointly by a spouse and a third party, that joint tenancy will be severed on death of the owner spouse. This will then preserve the rights afforded to a Matrimonial Home of the non-titled spouse by ensuring that the ownership does not transfer by right of survivorship to the surviving joint tenant.
Severing Joint Tenancy During Separation
In the event that parties hold title as joint tenants and upon a separation, it is highly advisable to recommend that they consider severing the joint tenancy to ensure that, should one of them pass away during separation and before an agreement has been reached, their interest in the property will pass through their will and not to their ex-spouse by way of right of survivorship.
Parties who are on title as joint tenants can unilaterally sever the joint tenancy and become tenants-in-common without advising the other joint tenant.
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