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  • Valuation Date

    I was a bit shocked to learn and still not believing the info that we were given and looking for some new opinions.

    I was under the understanding that the evaluation of the matrimonial home is backed dated to the date of separation.

    We've recently found out that the evaluation is done as of today's date.

    Hardly fair, when the other side has dragged his feet for two years and now the housing market has skyrocketed!

    Does anyone have any knowledge about this? The home is in Ontario

  • #2
    If the house was listed on the market and sold today the equity would be divided 50/50 and listed as such on the Net Family Property form. The actual amounts given to each side would depend on the other assets and debts. In addition, there would be a post-separation adjustment - so if one party was paying more than 50% of the carrying cost of the house post-separation that would be financially compensated. There may also be a claim for occupation rent, so the person who was not living in the house post-separation can claim "rent" as compensation against the 50% of the carrying costs of the house.

    Example:

    Jenny and John own a house worth $400,000 with a mortgage of $300,000. They separate in June 2019 and John moves out.Jenny pays all the expenses of the house from that point forward $2,000/ month for mortgage, insurance, maintenance, repairs, utilities and John lives somewhere elsewhere. Other houses in the neighbourhood with the same number of bedrooms and bathrooms rent for $2,000 a month. They have two children and they share residential parenting time.

    In June 2021 they sell the house for $600,000 and the mortgage is now $280,000. The equity after $20,000 in real estate fees, legal costs etc is $300,000. So each spouse in entitled to $150,000. But, Jenny claims half of the the $48,000 she has paid to maintain the house for the benefit of both parties ($24,000). So her share becomes $174,00 and John's share is $126,000. Then John claims occupation rent. Although the market rent is $2,000, that is partially supporting the children's living conditions so he claims only $1,000 month ($24,000). [Occupation rent is hard to get however and would generally only have been awarded if John HAD continued to pay the majority of the expenses of the house including the mortgage]. Now John's share is $150,000 and Jenny's share is $150,000 of the $300,000 equity. In addition, if John paid spousal support (especially voluntarily), he may be able to claim the money to an extent, especially if that money was relied on by Jenny to pay the mortgage.

    It isn't more unfair to one party vs the other (although I would argue the person who got to live in the house got the better end of the deal) but is trying to make it fair for both. The other option (divide matrimonial home strictly at date of separation) would see only one party reap all the benefits of a raising real estate market (or expose them to the risk of a crashing real estate market) before final settlement.

    Occupation rent (also deals with one party paying all MH expenses post-separation): O'Brien v O'Brien. https://www.canlii.org/en/on/onsc/do...#_Toc492628641
    Last edited by tilt; 06-05-2021, 09:04 PM.

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    • #3
      Tilt
      Incredibly detailed and the link was insightful. Thank you muchly.
      Unfortunately, trying to be brief, I did leave out important details. My apologies.

      She stayed in the home, he moved out. She made her intentions clear at the separation date that she wished to buy out his share. Over two years ago they agreed on the value of the home at 700K and he indicated that he wanted her to stay in the home.

      He, as the breadwinner, continued to pay the bills on the home while she stayed and he purchased another home.

      The intention was to wrap up the separation quickly as they seemed in agreement on most everything. She found a lawyer and had all her paperwork finished within one month.
      At this point, he stalled. Had a lawyer, then never responded. Hired a new lawyer and still stalled in getting his financials turned in.
      He handed in incomplete and incorrect financials and has stalled the process for two years.
      Now he wants an appraisal on the home and today's market value. The increase from two years ago has gone off the charts to the tune of almost 300k.
      Her lawyer, who advised her to not rush and stay in the home while he continued to pay all the bills, now says that the evaluation of the home that she intends to buy has gone from 700k to 1 million.
      Had he filed his paperwork in a timely fashion, she would not be looking at a 300 thousand dollar increase.
      When I went through a similar situation 10 years ago, the evaluation of the home was set back to the official date of separation.
      Has this changed?

      Comment


      • #4
        Korman v Korman was 2015, so yes, the date for valuation has been clarified.

        This is why Judges often encourage people to just sell the house and both start off in new homes. I assume she is aware that he can bring a motion under the partition act to sell the house (as can she). They did NOT agree to divide it at $700,000; otherwise the paperwork would have been signed and this would not be an issue today. She HOPED they had an agreement, which is not the same thing. She is facing a $150,000 increase, but also the fact that he paid the bills on the house is in his favour for a larger amount of the equity. Since interest rates have dipped she is probably not that much worse off. She should get the appraisal and a commitment from the bank and get moving on making him an offer to buyout and/or settle all issues.

        After two years they have presumable had all the necessary case conferences and settlement conferences and she should be pushing for a trial date. If she does not have complete financial information she should have already had motions before the Court compelling disclosure, and, when not receiving it, she should have a motion for contempt already filed (and after being found in contempt she could file for his pleadings to be struck). This has nothing to do with him not filing paperwork if she has not been taking active steps to protect herself and keep moving her case forward.

        Comment


        • #5
          There is no mortgage on the home and she has enough to buy him out. It's just the fact that he has stalled this for two years and now the valuation on the home has gone up expediently.
          Her lawyer has not pushed forward with case conferences claiming covid has backed up the system and just wait..."he's paying the bills".
          I guess in part this is my friends fault for not standing up to her lawyer and insisting on proceeding.
          Thank you kindly for sharing your knowledge.

          Comment


          • #6
            This happened to me as well. I learned that a professional certified evaluation should have been done on the matrimonial home on the date of separation. I sold the house after the market started taking off and my ex husband benefited from that (the house was solely in my name).

            Comment


            • #7
              Karma2016
              Hardly seems fair. When I was divorced, my ex stalled but everything including the value of the home was backed dated, so to speak, to the date of separation.

              Nothing is fair in divorce!

              Comment


              • #8
                Originally posted by Karma2016 View Post
                This happened to me as well. I learned that a professional certified evaluation should have been done on the matrimonial home on the date of separation. I sold the house after the market started taking off and my ex husband benefited from that (the house was solely in my name).
                How did your ex manage to do that? My ex and I have been separated for over 5 years and the MH is in his name and he says I won't get my share of the 500k to 700k ncrease.

                Comment


                • #9
                  https://m.youtube.com/watch?v=KHrA9WOojNM

                  See the link above.

                  If the MH is only under one spouse and the other spouse has not Contributed since the split the evaluation is based on the date of separation. I have gone through this myself. The party that is not on title won’t get any of the increases after the date of separation/valuation
                  Last edited by OB1; 06-08-2021, 06:11 PM.

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                  • #10
                    Originally posted by Jennys Friend View Post
                    Karma2016
                    Hardly seems fair. When I was divorced, my ex stalled but everything including the value of the home was backed dated, so to speak, to the date of separation.

                    Nothing is fair in divorce!
                    We separated in March 2016 and I sold in June 2016. The market was just taking off. Not enough of a increase to argue about it though.

                    Comment


                    • #11
                      Originally posted by trueblue22 View Post
                      How did your ex manage to do that? My ex and I have been separated for over 5 years and the MH is in his name and he says I won't get my share of the 500k to 700k ncrease.
                      That’s what he says.

                      I was told any my lawyer that unless I had the MH evaluated right after we separated, and certified, he would benefit from the increased market value when I sold it 3-4 months later.

                      Comment


                      • #12
                        Originally posted by Karma2016 View Post
                        That’s what he says.

                        I was told any my lawyer that unless I had the MH evaluated right after we separated, and certified, he would benefit from the increased market value when I sold it 3-4 months later.
                        My ex had a retroactive valuation done about a year after separation but that was 4 years ago. Based on what your lawyer told you and what my ex's lawyer told me (which my lawyer disputed) I'm no better off than before...

                        Comment


                        • #13
                          Originally posted by trueblue22 View Post
                          (which my lawyer disputed) I'm no better off than before...
                          Your lawyer gets paid no matter what happens to you. Of course they will dispute everything because it means $$$ for them. You end up fighting a lost cause and have to pay the lawyer out of the small amounts you get.

                          Which means if the only person telling you something different than the law or court decisions is the person you pay to fight for you, you need to think really hard if you want to spend money on a losing battle.

                          Look at your ex’s offer to settle and see if he will throw in a bit more to end the case. The longer it goes on, the more money you spend losing what you think you are entitled to.

                          Comment


                          • #14
                            Originally posted by Jennys Friend View Post
                            I was a bit shocked to learn and still not Hardly fair, when the other side has dragged his feet for two years and now the housing market has skyrocketed!
                            Yup, I'm getting screwed as well. 3 lawyers, CAS, criminal court, she's delaying everything and wants lifetime spousal. So unless we agree on CS (child custody issue..) and SS (which we cannot agree), there's no real way to get qualified for a mortgage. And prices around here have pretty much skyrocketed in the last 2+ years. It's maddening.

                            Many will say "just settle it!" but that's not always feasible when the other party moves the goal post. I guess she was right when she threatened to "spend every dime she has to make my life miserable and drag me through court for the rest of my life". Oh well, the kids are doing good.

                            Comment


                            • #15
                              Originally posted by alongjourney View Post
                              YSo unless we agree on CS (child custody issue..) and SS (which we cannot agree), there's no real way to get qualified for a mortgage.
                              If you end up paying a large enough amount of CS and SS you may still be screwed. (I went through this a year ago.)

                              These days, most mortgage lenders look at support payments as a debt, similar to a credit card debt. So if you're paying $6,500/month in support, they evaluate this as the same as if you have a credit card (or similar) debt that requires payment of $6,500/month. This means that most lenders will simply refuse to lend you any amount, irrespective of your actual income (minus support payments).

                              In my case, I went through a mortgage broker who found a 2nd tier lender who would look at my net take home salary after support payments and lend me money based on that amount.

                              Comment

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