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  • property owned before marriage

    Hi there
    I've been reading posts from this site, and they have been quite helpful, however I can't seem to find an answer to a burning question I have.
    I purchased my house in Gatineau in 2004, while I was in a relationship. We moved in together and got married in 2005 (in Ottawa). My partner and I left Gatineau and the house became a rental property from 2008 til April 2012, which is when we separated. My question is, how should this be claimed on my NFP? The current house value is $150 000, but I still owe $60 000, profits were never made from this house, the tenant's rent covered taxes and the mortgage. Unfortunately when I took the house back it needed major repairs . Any advice would be greatly appreciated.

  • #2
    Originally posted by sayitaintso View Post
    Hi there
    I've been reading posts from this site, and they have been quite helpful, however I can't seem to find an answer to a burning question I have.
    I purchased my house in Gatineau in 2004, while I was in a relationship. We moved in together and got married in 2005 (in Ottawa). My partner and I left Gatineau and the house became a rental property from 2008 til April 2012, which is when we separated. My question is, how should this be claimed on my NFP? The current house value is $150 000, but I still owe $60 000, profits were never made from this house, the tenant's rent covered taxes and the mortgage. Unfortunately when I took the house back it needed major repairs . Any advice would be greatly appreciated.
    Wow, that's a bit complicated. I think we might need more information. Was/is she on title as an owner? If so, she owns half of it and is liable for half the remaining mortgage. Do you own another home with her that you live in? If so, that would be the matrimonial home to be divided equally, and the rental with its mortgage would go solely in your assets/debts as you owned it prior to marriage. Unless she's on title as noted previously.

    If you don't own another home, I'm not sure if this one would still qualify as the matrimonial home as you resided permanently elsewhere at separation. In this case, you may want to offer her half the increase in value between date of marriage and date of separation, if it helps you avoid court to argue about it.

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    • #3
      Thanks for replying Rioe.

      I guess I should've specified that she is not on title as an owner, and we had been renting a house in Ottawa for 4 years when we separated.

      Since we only lived in that house for 3 years as a married couple, would I still have to use the current value of the home on the NFP? How does the assessed value at DOM ($70.5k) factor in?

      Again, any advice is greatly appreciated.

      Comment


      • #4
        Family Law Act defines Matrimonial Home 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 is their matrimonial home."

        My breakdown of your timeline

        2004 - you buy a house, it is solely yours. It has a value at purchase, and a mortgage on it.
        2005 - your future spouse moves in with you.
        2005 - you get married. The house becomes a matrimonial home, and she suddenly becomes half owner of the house even if she's not on title, and therefore half the value on this date is now hers, and half the mortgage as well.
        2008 - you move away into a rental place, and rent out this place. It ceases to be the matrimonial home and just as suddenly, she loses all her entitlement to half of it.
        2012 - you separate. It has a value at separation and a mortgage on it.

        So, as you did not ordinarily occupy it as the family residence at the time of separation, it was not legally a matrimonial home by strict interpretation. However, it is an asset and a debt that you must put on your half of the financial disclosure, and she may be entitled to half the increase in value from date of marriage to either the date you moved out, or the date of separation. I'm not sure which. It sounds like they may be pretty similar due to the repairs needed.

        I guess, just as few married couples understand that the matrimonial home is always divided equally no matter how unequal the funding of it, few married couples realize that this no longer applies if you no longer live in it.

        I would treat it as though you had never lived in it together. Find out the value at date of marriage, subtract the mortgage at that date, and then subtract the result from $90k. Then put that in your column as the amount the asset increased in value during the course of the marriage, which would be divided with her.

        Maybe more knowledgeable people could chime in, as I am making a lot of assumptions here, and couldn't find manageable hits on Canlii. I am thinking it may not be as cut and dried. She or her lawyer might argue that it could easily have resumed being the matrimonial home if you had moved back instead of separating or something.

        Basically, I guess it comes down to money and court costs to argue over it. If you only put a small down payment, and its value at separation isn't that great due to the tenants, there might not be much money to be argued over. But my suggestion would be to put it down as a property asset solely on your side to start with as described above, and let your ex argue why it should be otherwise. Then if she does, you can decide if the difference in amounts is worth standing firm on. If she doesn't, hurray!

        And don't ask me if the fact that the house is in Quebec has any bearing, because I haven't got a clue about that part.
        Last edited by Rioe; 08-30-2012, 09:42 PM.

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        • #5
          I have a feeling it will be deemed a matrimonial asset simply by the virtue it was co-mingled with matrimonial assets.

          Not only was it the matrimonial home for some time, but unless he ensured that all rental income accrued from the house was put into a separate account that was in his name only, the income accrued from the house would also be co-mingled, giving further weight to the argument that it is a matrimonial asset. I don't believe the STBX's entitlement to it would be wiped away because it is no longer the matrimonial home.

          The OP will likely be entitled to their deposit and any equity in the house prior to it becoming the matrimonial home. But any increase in equity from marriage forward, will likely be split.

          Comment

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