Disclaimer: This article aims to provide educational information surrounding separation and divorce. It is not intended to serve as legal advice. Consult with a lawyer and exercise your discretion before taking action based on the information provided in the blog.
In one of our earlier articles, we discussed exclusive use of the matrimonial home after separation. Now let’s talk about what happens next.
When one spouse no longer lives in the matrimonial home, it creates a financial imbalance. After all, while one party continues to live in the home, the non-resident spouse cannot access their share of the equity in the home and must also cover new housing costs – no small feat in today’s challenging housing market!
That is where the legal remedy of Occupation Rent becomes part of the conversation. In this article, we will explain what that term means and discuss a recent Court of Appeal case (Chhom v. Green, 2023 ONCA 692), which sheds light on how courts in Ontario approach occupation rent.
What is Occupation Rent?
Occupation rent is a remedy made available under Section 24(1)(c) of the Family Law Act. It compensates one spouse for the other spouse’s exclusive use of the matrimonial home after separation.
It recognizes the financial imbalance created when one party occupies the home while the other cannot access its equity in the property.
Occupation rent isn’t meant to be punitive or punish anyone; it’s designed to be fair. The goal is to ensure both people are treated justly, especially considering the spouse who moved out might face financial challenges because they can’t use the home.
The courts consider several factors to consider when making this decision (as outlined in Griffiths v. Zambosco):
- The timing of the claim for occupation rent
- The duration of the occupancy
- The inability of the non-occupying spouse to realize their equity
- Any reasonable set-off costs
- Any other competing claims in the litigation
Historically, courts have been reluctant to impose occupation rent on the occupying spouse in family law cases. Traditionally, the courts looked for evidence of “ouster” (the deliberate prevention of access to a titled owner).
Ontario Family Law Principles outlined in Chhom v. Green
Ms. Chhom and Mr. Green jointly owned a family home but separated in July 2017. Ms. Chhom continued to occupy the home exclusively. During their separation, Mr. Green made voluntary payments of $4,000 per month to Ms. Chhom until January 2020.
At trial, Justice Ramsay ordered the home to be sold and directed Ms. Chhom to pay Mr. Green $31,500 in occupation rent. Ms. Chhom appealed the decision, arguing that the trial judge erred by not requiring the order for occupation rent to be “exceptional.”
However, the Ontario Court of Appeal disagreed, noting that while occupation rent must be reasonable, it does not need to be exceptional. Therefore, it ruled that the trial judge correctly applied the relevant factors in determining the award for occupation rent.
What does this mean for your matrimonial home?
When we consider the factors applied by the courts, two of them center on timeliness: the timing of the claim and the duration of the occupancy. Therefore, if you are separated and you or your spouse has exclusive possession of the home, you’ll want to consider how you move forward.
If you’re the spouse who left the home: You may want to consider a motion to sell the matrimonial home as soon as possible. This may be simpler than claiming occupational rent and having to determine the value of the rental.
If you’re the spouse who remains in the home: You need to weigh your options. Even if you’re paying for the mortgage, utilities and other items, you need to determine if those costs balance out the rent you might have to pay. This is especially true considering Ontario’s high housing prices.
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Dealing with family law matters can be overwhelming, especially regarding complex issues such as property rights.
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