When One Partner Stays in the Matrimonial Home, Is Occupational Rent Due?

When a couple separates, usually one person stays in the matrimonial home and the other moves out. Sometimes this is by mutual consent of both parties; other times, it’s a spontaneous decision made in order to end the constant fighting or to leave a toxic or abusive situation.

The issue that must be settled next is which partner is responsible for paying the home’s expenses, including mortgage or rent, utilities, and upkeep. Both partners usually have several questions about what to do about the marital home, including:

• Who can access the marital home after separation?
• Can one partner force the sale of a jointly-owned property?
• Who pays the mortgage?
• Who pays the expenses on the home?
• Who pays for upkeep?

Ontario law does not specifically address these issues, but there are a number of legal precedents that may come into play, including occupational rent law. We focus on just occupational rent in this blog.

What Is Occupational Rent?

Occupational rent is money that the resident homeowner pays to the non-resident homeowner. Essentially, it is compensation for occupying the non-resident owner’s share of the home. It is one way to equalize the financial burden of the matrimonial residence, especially in cases where separation and divorce proceedings go on for an unusually long time while one partner stays in the home. While Ontario courts try to make divorces as quick and easy as possible, sometimes circumstances just don’t allow that, meaning that action must be taken to ease the financial burden of maintaining a home that one partner is no longer living in.

When Is Occupational Rent Considered for the Matrimonial Home?

Occupational rent is not always paid; in fact, more often than not, it doesn’t apply at all. Usually, couples sell the family home in order to get out from under the mortgage, and use the proceeds to find new homes to fit the new circumstances. Also, if the spouses are both still paying the mortgage after separation, it often doesn’t make sense to bring it up since occupational rent would usually come to about the same amount as half of the mortgage payment.

However, there are situations when occupational rent law would apply. Factors taken into consideration when deciding whether occupational rent will be due include:

• Conduct of the spouses and circumstances surrounding the occupation of the home
• Where the children reside and who supports them
• When the demand for occupational rent was made
• Financial difficulty of the non-occupying party as a result of failing to realize their investment
• Who is paying the bills on the home

How Is the Question of Occupational Rent Resolved in Court?

As always, the goal is to resolve outstanding issues in the divorce process through mediation or your lawyers’ negotiations. If that isn’t possible, the remaining options are arbitration and family court.

In arbitration, a neutral third party is chosen to hear both sides of the issue and make a decision. The arbitrator’s ruling is binding in court, provided it isn’t in violation of any law.

The final option and last resort is family court. There are many opportunities to resolve issues and finalize a divorce before it gets to this point, but sometimes it’s unavoidable. In this case, each party presents their case before a judge, who then decides how to resolve the matter.

It’s very important to understand the laws surrounding the matrimonial home and to think ahead in order to avoid going to court. To avoid complicating the situation any further, take the following steps:

• Seek legal advice
• Claim occupational rent early in the process if you think it applies
• Conduct yourself well to avoid complicating the situation further
• Avoid doing any major work on the house until the matter is resolved
• Continue to pay the bills

Concerned About the Marital Home? Contact Galbraith Family Law

The issue of what to do about the marital home can be a surprisingly complex one. Can you force the sale of a jointly-owned property? Who is responsible for paying the mortgage after separation? What are the rules regarding access to the marital home after separation? And will the occupying partner have to pay occupational rent to the non-occupying partner?

Galbraith Family Law can answer all of these questions and more. Instead of trying to figure everything out on your own, get in touch with us by sending a message through our website or by giving us a call. Our Newmarket office is at (289) 802-2433 and our Barrie office is at (705) 302-1102.