In the event of a divorce or separation, finding agreement on which spouse will continue to live in the previously shared family home is a significant step forward. With its elevated degree of importance, this decision is also remarkably nuanced. 

Divorce is a complicated process, entailing legal and logistical elements, in addition to diverse emotional and personal challenges. To that end, couples undergoing divorce or separation are not always in immediate agreement on who will keep the matrimonial home. 

This article is intended to provide high-level guidance on reaching an agreement on who gets the home during a divorce. As well as essential information on the often-complex buyout process in Ontario. Continue reading for further insights.  

In a Divorce, Who Gets the House?

Dividing assets in a divorce, including the shared home, requires mutual agreement. If both parties wish to keep the home, this can present challenges. As outlined by Ontario’s Family Law Act, both spouses share equal rights to the matrimonial home and its equity. Therefore, neither party will have a greater legal claim to the property than the other. 

Deciding who keeps the home requires careful consideration of familial, financial, and practical factors. Both spouses should clearly and openly communicate their desired outcomes, concerns, and reasons as they move forward.

Due to the complex nature of these negotiations, both spouses should consult with their lawyers during the mediation process. This consultation is key to providing guidance and structure to the process. It also ensures that each spouse’s rights and interests are protected.

Who Gets the House in a Divorce With Children?

The well-being of the children is often the primary consideration for many families when determining which parent will keep the home. Divorce is a major transition for all involved, but it can be especially difficult for young ones. Maintaining some degree of familiarity and stability can be beneficial for them. Therefore, if one spouse has primary custody of the child (or children), they will typically retain the matrimonial home. 

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What Happens to Property Owned Before Marriage?

In terms of rights and legality, the matrimonial home is designated as a shared asset immediately upon marriage. This is irrespective of whether one spouse held independent ownership of the property prior to getting married. 

If you and your spouse were formally married, matrimonial home rights will override any individual ownership claims. However, this is not the case for common-law or unwed cohabiting couples. 

How to Buy Out a Partner in a House

After determining which spouse will keep the property, you may proceed with the buyout process. This is when one party purchases the other’s share of the matrimonial home. 

Buyouts are a unique type of real estate transaction, involving intricacies not common to a typical home purchase. One of these nuances regards calculating equity. More specifically, when one spouse purchases the other’s interest in the matrimonial home, the amount paid is not based on one-half of the initial purchase price. Instead, the buyout amount must reflect the home’s present market value.

Obtaining an approximate valuation of the home requires an appraisal from a trusted and unbiased third party, such as a real estate agent or professional appraiser. Both spouses will ultimately need to agree on the amount before the buyout can proceed. 

Online tools, such as a dedicated divorce buyout calculator, can provide useful estimates and calculations. These tools factor in property value, existing debts, the division of other assets, disposition expenses, and more. 

Selling Your Matrimonial Home Together

Should neither spouse wish to keep the matrimonial home, they may elect to sell the property jointly. When the home is sold jointly, the parties work together to prepare, list, and sell the house, with the guiding support of an unbiased real estate agent. Following the sale, proceeds are split evenly, and the couple is free to move forward and focus on other aspects of their divorce proceedings.

Basic Requirements: Separation Agreement

Formal divorce proceedings in Ontario cannot be initiated until the court is notified of your intentions. To do this, you must file a separation agreement. 

Signed by both spouses, a separation agreement is a critical document detailing important aspects such as custody arrangements, spousal and/or child support obligations, and other necessary specifics. Like any legally binding documentation, it is advisable to draft and complete your separation agreement with the guidance of a trusted lawyer. 

Spousal Buyout Programs in Ontario

Specifically tailored for couples undergoing divorce, the Canada Mortgage and Housing Corporation (CMHC) offers a spousal buyout program. Applicable in Ontario and throughout Canada, this program permits the acquiring party to refinance their mortgage up to 95 per cent of the property’s appraised value. Such an elevated loan-to-value ratio is especially advantageous for partners who may lack significant liquid assets to finance the buyout directly.

As with other critical aspects of divorce proceedings, couples must possess a completed separation agreement in order to qualify for the CMHC spousal buyout program. 

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Searching for results-oriented selling advice. Consider these related resources from our team. 

• What Are The Costs of Selling a Home?
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Compassionate Support From Real Estate Experts

If you are currently navigating a transition in your personal life and need to sell your matrimonial home, Armin Group can guide you toward your new chapter with clarity and ease. Recognizing that real estate transactions possess a deeply personal dimension, our client-centric approach far exceeds the parameters of your typical agent. 

Our commitment to you is twofold, encompassing both unrivalled service and results. Whatever the state of the market may be, our elevated industry profile, refined strategies for selling, and vast professional connections ensure your experience is seamless.

Buying or selling in Toronto? Armin Group can help. Send us an email at ar********@************ty.ca or call 416.960.9995 to begin your journey.