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Divorce & Family Law This forum is for discussing any of the legal issues involved in your divorce.

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Old 11-11-2015, 07:02 PM
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Default Personal Loans and Matrimonial House

Hi everyone I am new to all the legalities and have yet to choose a lawyer so I have a few questions

My ex and I both brought houses into our marriage. We lived in his house when we got married then moved into my house after we got married and lived there until we separated. After we Got married his house became a rental property. I never recieved any income from the rental.

When we moved back into my house we borrowed a large sum of money from my parents for renovations to the house. I have personally been paying these back monthly. When we separated my ex and I agreed verbally to just keep our own houses and remaining debts. Now he has hired a lawyer and decided he wants me to pay for the time (renovation labour) he put into the house
He says because the loan was from my parents he is not responsible for paying it.
If the outstanding loan and mortgage value is more than he assement value of the matrimonial home I won't be responsible for paying him anything will I? If his house that he now lives in and is no longer a rental property has equity would he not end up paying me?

I don't know how it all works and the personal loan and additional house make it more complicated. Any information is greatly appreciated.
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Old 11-11-2015, 07:31 PM
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Welcome to the forum.

What a shame that the two of you couldn't just work together in coming to an agreement and then take it to respective lawyers with your instructions.

The problem is that lawyers are like any other business person - they see an opportunity to make money. The longer and more contentious the disagreement between you and your ex the more money they make.

I would recommend that you try to communicate with your ex that you want to settle the matter in the manner in which you had agreed. Any gain he thinks he may obtain, by holding out for the sweat equity he perceives he is entitled to, will most definitely be swallowed up by his legal fees. I would stress to him that his taking this position is putting you in a defensive position rather than a collaborative one. However, perhaps if all he wants is sweat equity then you have to consider ceding this in order to avoid a long protracted litigation.

You will receive lots of excellent advice from many of us on this forum who have gone through lengthy and very costly legal battles. Before it is too late, and you get embroiled in a very unpleasant and expensive battle, you should see if there is any common ground between the two of you to calmly keep this matter as simple as possible.

When you retain an attorney you will definitely be told that you are "entitled" to much more. Lawyer will essentially blow smoke up your ass (like your ex's lawyer has done) and often promise you the moon.

I assume you did not have a prenuptial agreement.
There is no "his" money or "my" money when you are married as long as the proceeds from any income, investment or inheritance went into the family coffers and was enjoyed by the family. If you kept assets separate and they never touched your family whatsoever then they might be considered for exclusion. Some provinces have different laws regarding matrimonial property (Alberta is one so you must consider that). If the money from the rental property was used for family expenses then it would be deemed to be matrimonial (joint) regardless of who's name the property is listed under.

Others on here will chime in about how things are calculated and viewed. I just hope that you can talk some sense into your ex and keep things as simple as possible with an eye to potential legal costs.

Remember, the lawyers that you and your ex hire will have an eye on your bottom line (net worth). Most family law matters are settled out-of-court. I personally think that is because the lawyers structure the litigation based on how much money the couple can afford to spend.
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Old 11-11-2015, 09:34 PM
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Here is a recent decision from Ontario which involved calculation of Net Family Property. From what you have stated, you and your ex's "excluded" property would probably be the properties you both owned prior to marriage.

https://www.canlii.org/en/on/onsc/do...&resultIndex=2
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Old 11-11-2015, 09:54 PM
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Thank you so much for your responses and help. He seems to change his mind often on what he wants. All I wanted was an agreement that benefited our children and could be settled amicably without lawyers. I thought we were headed that way until I got a surprise letter that he had retained a lawyer and changed what he was seeking.


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Old 11-12-2015, 03:16 PM
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It looks like there's no clear-cut marital home here, if you lived first in his house and than in yours. If we treated both houses as assets and neither as the marital home, I would guess that both of you are entitled to the value of the respective houses at the time of marriage. Any increase or decrease in the value of either house during the duration of the marriage is shared between you. So if your house was worth $200K on the day you got married and is now worth $250K, the increase of $50K is part of the marital property which is shared. Similarly, if his house was worth $200K on the day you married and is now worth only $150K, the loss of $50K would be subtracted from the marital property.

With respect to your ex's claim for "sweat equity" that he put into your house, I believe that unless he can show a specific improvement he made, which can easily be assessed in terms of the dollar value he added to the home (e.g. he added a garage all by himself) or unless he has a specific skill which could be costed by the hour (e.g. he's an electrician and rewired the whole house), it would be very difficult for him to make the case that he is owed money. He will get the benefit of his efforts when the property is equalized, if he raised the value of the house during the marriage. However, your case sounds complicated enough that it might be worthwhile to offer him a lump sum - say $5K - to settle all his claims to improvements in the home, rather than spending the same $5K in court.

I believe the outstanding amount of the loan from your father is a marital debt which you share, as it was used for the benefit of both of you during the marriage.

As for the fact that you have been mainly responsible for paying down the loan and you have not been spending the income from the rental property, I think that's water under the bridge. As Arabian says, there's really no "his" or "hers" money during a marriage, so the fact that you paid down the loan while he spent the rental income while you were married is not really relevant. That money is gone - you start calculating your separate finances as of the day of separation.

However, I am not a lawyer and could be wrong about some or all of this.
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Old 11-16-2015, 04:44 PM
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Quote:
It looks like there's no clear-cut marital home here, if you lived first in his house and than in yours.
From OP's description, it looks pretty clear that her house is the matrimonial home.

Definition: 18. (1) 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 is their matrimonial home.

Citation: https://www.canlii.org/en/on/laws/st.../#sec18subsec1

OP may want to receive legal advice, considering her case is an intersection of:
- equalization, including the need to prove a separation date debt
- matrimonial home exception
- unjust enrichment claim
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Old 11-16-2015, 05:37 PM
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Quote:
Originally Posted by OrleansLawyer View Post
From OP's description, it looks pretty clear that her house is the matrimonial home.

Definition: 18. (1) 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 is their matrimonial home.

Citation: https://www.canlii.org/en/on/laws/st.../#sec18subsec1

OP may want to receive legal advice, considering her case is an intersection of:
- equalization, including the need to prove a separation date debt
- matrimonial home exception
- unjust enrichment claim
Thanks for this information. I didn't know what the legal situation was if a couple lives first in a house belonging to one person, then in a house belonging to the other. But if the house they live in at the date of separation is always considered the marital residence, it's more clear.
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Old 11-20-2015, 11:00 AM
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I came across this recent decision on CanLii which considers money owed to family. You might find it relevant to your situation:

https://www.canlii.org/en/on/onsc/do...5onsc6375.html

A good thing the parents put the money owed to them from their children in their will as it appears this was a key element that judge considered in determining the money owed was indeed a matrimonial debt.
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Old 11-22-2015, 07:13 AM
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Thank you everyone. We kept our finances separate, even during marriage. He gave me one cheque a month which didn't cover much. He insists he isn't responsible for the loan because it is from my parents and he didn't sign anything. He was well aware of the loan and spent most of the money from it without consulting me to the purchases or renovations he was doing. I had a consult with a lawyer months ago who told me because of the loan their would be no equity in my home but his house should have equity and he would likely end up owing me if we equalized, I guess time will tell when all paperwork is submitted.


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