Does a Spouse's Name on the Title Matter in Ontario Property Division?

You may have lived in a home for years without your name on the deed or the mortgage. When the relationship ends, it is natural to worry that you have no claim to it.

For married spouses in Ontario, title is only part of the picture. This article explains how title affects equalization, what rights you keep in the matrimonial home regardless, and where the rules work differently.

Title does not decide equalization

Equalization is a payment of money. It is not a split of each asset, so the question is not who owns the house on paper. When spouses separate with no reasonable prospect of resuming cohabitation, or when a divorce is granted, the spouse with the lower net family property is entitled to one-half the difference between the two net family properties.

Net family property is the value of all property a spouse owns on the valuation date, minus excluded property, minus the spouse's debts and other liabilities, and minus the net value of property (other than a matrimonial home) owned on the date of marriage. Because the calculation compares each spouse's total, a home held only in your spouse's name will normally show up on their side of the ledger, and the difference is then shared.

The purpose behind this is that child care, household management and financial provision are joint responsibilities, and each spouse contributes equally to them, whether financially or otherwise. The amount owed is then worked out by comparing the two spouses' totals, dividing the difference by two, and having the spouse with the larger total make the payment.

Your rights in the matrimonial home

Both spouses have an equal right to possession of a matrimonial home, whoever holds title. Moving out does not end this statutory right. If only one spouse has an interest in the home, the other spouse's right of possession is personal against the owner spouse and ends when they stop being spouses, for example on divorce, unless a separation agreement or court order provides otherwise.

A matrimonial home is a property in which a person has an interest and that is, or was at separation, ordinarily occupied by the person and their spouse as their family residence. A couple can have more than one, such as a house and a cottage both used as family residences. A rental property the couple did not live in as a family residence does not qualify. Shares in a corporation that entitle you to occupy a unit, as in a co-op, can also count. If the property includes a matrimonial home but is normally used for a non-residential purpose, such as a dairy farm, only the part reasonably needed for the use and enjoyment of the residence is the matrimonial home.

• No spouse may sell or mortgage an interest in a matrimonial home unless the other spouse joins in or consents, has released their rights by separation agreement, a court authorizes it, or another property has been properly designated as the matrimonial home.
• A court may authorize a transaction if the other spouse cannot be found, is incapable of consenting, or is unreasonably withholding consent.
• A court may order that one spouse have exclusive possession of the matrimonial home regardless of who owns it, and interim orders are available on motion.

There is an exception for buyers and lenders. A transaction made without the required consent can be set aside, but not where the person holding the interest acquired it for value, in good faith and without notice that the property was a matrimonial home.

What title can still affect

Title is not irrelevant. It matters in the following ways.

If the home is jointly owned, either owner may also apply under the Partition Act for partition or a sale, and the court may direct a sale if it considers that more advantageous to the parties. How a court treats that request alongside a family law claim depends on the facts and is worth discussing with a lawyer.

Special cases to watch for

• Home owned before marriage: the usual deduction for property owned on the date of marriage is not allowed for a matrimonial home, so its full value is included even if one spouse owned it before the marriage.
• Inherited or gifted home: a family home that was inherited or received as a gift is not excluded property and is counted in full.
• Marriage contract or separation agreement: a domestic contract dealing with a matter also covered by the Family Law Act prevails unless the Act provides otherwise. A marriage contract term limiting possession and consent rights in the matrimonial home is unenforceable. A separation agreement can release those rights.
• Unmarried partners: common-law couples are not legally required to split property acquired while living together, and there is no equalization or statutory matrimonial-home right for them. A partner who contributed to property the other owns may have a right to part of it, and may need to go to court.

What to do next

• Gather proof of what each of you owns and owes, including account statements, mortgage and loan records and pension information.
• Do not sign anything about the home, such as a consent to sell or mortgage, until you understand it.
• Keep any marriage contract or separation agreement handy, because it may change the result.
• Watch the time limit: an equalization application cannot be brought after the earliest of two years after a divorce, six years after separation with no reasonable prospect of resuming cohabitation, or six months after the first spouse's death, although the court may extend a time limit in the Act if there are apparent grounds for relief, the relief is unavailable because of delay incurred in good faith, and no person will suffer substantial prejudice because of the delay.
• If you are worried about assets being sold or spent, ask a lawyer about court orders that can restrain dealings with property or require security.

If you start a court claim, a party making a property claim must serve and file a financial statement in Form 13.1. A lawyer can confirm how the rules apply to your situation.

Frequently asked questions