Marriage Contracts and the Matrimonial Home in Ontario

Many couples sign a marriage contract to set out who keeps what. It is natural to assume the contract can also decide who gets the family home if the relationship ends. In Ontario, the matrimonial home is treated differently.

This article explains what a marriage contract can and cannot do about the home, where it still matters, and what to check if you already have one.

The basic rule on the home

Under the Family Law Act, a marriage contract term that tries to limit a spouse's rights under Part II (Matrimonial Home) is unenforceable. That covers the equal right of possession, which both spouses have whether or not their name is on title.

So even if the contract says one spouse gives up any right to live in the home, that term will not be enforced against the Part II rights.

A matrimonial home is any property in which a spouse has an interest and that is or was ordinarily occupied by the spouses as their family residence. If you have separated, this is judged at the time of separation, and a couple can have more than one matrimonial home. Owning shares in a corporation that give a right to occupy a housing unit, such as in a co-operative, counts as an interest in that unit.

If only one spouse has an interest in the home, the other spouse's right of possession is personal as against the owning spouse. Title alone does not tell the whole story, which is why it is worth reading your contract alongside the Act.

What a marriage contract can still do

A domestic contract generally prevails over the Act unless the Act provides otherwise. The restriction on matrimonial home rights is one place where the Act does provide otherwise.

A contract can still deal with other matters. For example, property the spouses agreed by domestic contract to exclude is excluded from net family property. Be careful, though. The gift and inheritance exclusion does not apply to a matrimonial home, and no date-of-marriage deduction is allowed for a property that is a matrimonial home. How these rules interact with your specific wording is worth confirming with a lawyer.

This matters if one spouse owned the home before the marriage. The family home's full value is shared even then. A gift or inheritance used to buy or pay down the family home also loses its protection. Gifts between spouses are not excluded under the gift and inheritance rule, although a court may consider them when deciding whether to vary the equal share.

• Terms limiting Part II home rights: unenforceable.
• Terms excluding other property from net family property: addressed by the Act as a permitted exclusion.
• Formalities: writing, signatures and a witness are required.

Formalities and disclosure

A marriage contract, cohabitation agreement or separation agreement is unenforceable unless it is made in writing, signed by the parties and witnessed.

A court may set aside a domestic contract, such as a separation agreement, if a party failed to disclose significant assets, debts or other liabilities that existed when it was made. Full disclosure when signing protects the agreement.

Release of rights in a separation agreement

One of the situations in which a spouse may sell or mortgage a matrimonial home interest is where the other spouse released their rights in a separation agreement. A spouse's right of possession, when only the other spouse has an interest in the home, ends when they stop being spouses unless a separation agreement or court order says otherwise.

If you are a common-law couple, the Part II right of possession does not apply to you at all. A cohabitation agreement works in a different framework, so get advice about your own situation.

Selling, mortgaging and getting court help

Even with a contract in place, the Act limits what one spouse can do alone. A spouse may not sell or mortgage an interest in a matrimonial home unless the other spouse joins in or consents, the other spouse released their rights in a separation agreement, a court order authorizes it, or a different property has been designated as the matrimonial home by both spouses and that designation is registered.

There is an exception for good-faith buyers. A court cannot set aside a sale or mortgage made in breach of that rule if the buyer or lender acquired the interest for value, in good faith and without notice that the property was a matrimonial home.

• The court may decide whether a property is a matrimonial home, and may authorize a sale or mortgage where the other spouse cannot be found, cannot consent or unreasonably refuses to consent.
• The court may order that one spouse be given exclusive possession of the matrimonial home.
• In deciding exclusive possession, the court considers factors that include the best interests of the children, the availability of other suitable and affordable housing, and any violence by a spouse against the other spouse or the children.
• One or both spouses may designate a property as a matrimonial home, and the designation may be registered in the proper land registry office.

What to do next

• Find your signed contract and check it was witnessed.
• Highlight any wording about the home, possession, sale or mortgage.
• Note whether any property was meant to be excluded from equalization.
• Gather your financial disclosure from the time you signed.
• Ask a family lawyer to review the contract before you rely on it.

Frequently asked questions