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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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  #1  
Old 06-05-2021, 04:52 PM
Jennys Friend Jennys Friend is offline
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Default 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
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Old 06-05-2021, 08:47 PM
tilt tilt is offline
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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 at 09:04 PM.
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Old 06-05-2021, 09:23 PM
Jennys Friend Jennys Friend is offline
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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?
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Old 06-05-2021, 09:45 PM
tilt tilt is offline
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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.
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Old 06-06-2021, 10:38 AM
Jennys Friend Jennys Friend is offline
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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.
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Old 06-07-2021, 02:30 PM
Karma2016 Karma2016 is offline
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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).
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Old 06-07-2021, 02:58 PM
Jennys Friend Jennys Friend is offline
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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!
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Old 06-07-2021, 11:33 PM
trueblue22 trueblue22 is online now
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Quote:
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.
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Old 06-08-2021, 06:04 PM
OB1 OB1 is offline
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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 at 06:11 PM.
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Old 06-08-2021, 09:53 PM
Karma2016 Karma2016 is offline
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Quote:
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.
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