Renovations Paid by One Spouse on the Other's Home in Ontario

Perhaps you paid for a new kitchen, an addition or a roof on a house that is in your spouse's name. Now the relationship is ending and you want to know whether that money is protected, or whether the house is simply your spouse's.

The answer depends on whether you are married, how the house is classified, where the money came from and what you can prove. This article explains the main ideas in general terms, so you know which questions to ask a lawyer.

Start with whether you are married

For married spouses, the starting point is equalization. Property acquired during the marriage is generally split equally, and the spouse with the smaller share is owed an equalization payment. A home owned by only one spouse is still part of that analysis.

Common-law couples are not legally required to split property acquired while living together. A partner who contributed to property the other owns may have a right to part of it, and may need to go to court to recover that contribution. For renovations, that means the proof of your contribution carries much of the weight.

How the home and renovations may show up in equalization

If the house is a matrimonial home, the family home must be divided equally unless the spouses agree to a different split. A home a spouse brought into the marriage and that is still the matrimonial home at separation cannot have its marriage-date value deducted; if it was sold before separation, the value is deductible.

The same property cannot be counted twice, as both an excluded item and a marriage-date deduction. In one Court of Appeal case, correcting that kind of error reduced an equalization payment from $43,547 to $38,924. Careful classification of each item changes the result.

Where the renovation money came from

Property acquired by gift or inheritance from a third person after the date of marriage is excluded from net family property, but that exclusion applies to property other than a matrimonial home. The same goes for property into which it can be traced. If you used an inheritance to renovate a house that is the matrimonial home, whether the excluded character survives is a point to raise with a lawyer.

Money did not lose its excluded character merely because it was first deposited in a joint account. Tracing is possible, but it depends on records, so keep bank statements.

Is there a separate claim?

Possibly. Under s. 10 of the Family Law Act, trust claims, whether constructive or resulting, may be advanced before equalization. A trust claim argues that your contribution gave you an interest in the property beyond what the title shows. Whether it succeeds depends on the evidence and on how the money was given.

A court may also depart from equal division, but only where equalization would be unconscionable. That is a high standard, and it is not available just because one spouse paid more.

Spouses can settle these questions by a domestic contract such as a separation agreement. The time limit for a married spouse's property claim is six years from the day of separation or two years from the day the divorce is final, whichever comes first. Time limits for other kinds of claims should be checked with a lawyer.

What to do next

• Collect invoices, contracts and permits for the work.
• Gather bank and credit statements showing who paid and when.
• Note whether any of the money was a gift, inheritance or from a joint account.
• Save messages or emails where the two of you discussed the work.
• Find out how title is held and whether the house is a matrimonial home.
• Get advice early about the time limits that apply to you.

Courthouse family mediation is free on the day you are scheduled to be in court, and it can help with property division. Off-site mediation is charged on a sliding scale based on income and number of dependents.

Frequently asked questions