The Ontario Superior Court recently found that a spouse, who had stayed behind in the matrimonial home after separation, was not required to pay “occupation rent” to the other spouse who moved out pending the divorce trial.

What Happened?

Mr. and Mrs. O’Brien married in 1985 and began having marital issues after 2000. In August 2009, Mrs. O’Brien expressed her intention to separate. She moved out in August 2010.

It was not until seven years after their separation that divorce proceedings were commenced. Neither the husband nor wife finalized the property-equalization process, and the home significantly increased in value. The husband continued to live there during this time. He also paid all the home expenses, renovated the home, and paid down some of the mortgage.

It was the husband’s position that the wife was required to pay her share of the maintenance and improvement expenses. The wife counter-argued that the husband needed to pay “occupation rent.” She claimed that he owed her $1,800 per month over the seven-year duration, which totalled $78,000, and gave him notice of that claim prior to the divorce proceedings.

Both the husband and wife agreed that the value of occupation rent would be $1,800/month, totalling $78,000 at the time of the trial. The issue, however, was whether occupation rent was actually owing.

The Law

A previous decision considered the factors to consider in a claim for occupation rent:

  • The timing of the claim for occupation rent;
  • The duration of the occupancy;
  • The inability of the non-resident spouse to realize on her equity in the property;
  • Any reasonable credits to be set off against occupation rent,
  • Any other competing claims in the litigation

In that case, the court drew additional factors from another prior decision:

  • The conduct of the non-occupying spouse, including the failure to pay support;
  • The conduct of the occupying spouse, including the failure to pay support;
  • Delay in making the claim;
  • The extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;
  • Whether the non-occupying moved for the sale of the home and, if not, why not;
  • Whether the occupying spouse paid the mortgage and other carrying charges of the home;
  • Whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;
  • Whether the occupying spouse has increased the selling value of the property;
  • Ouster is not required, as once was thought in some early decisions

The case law also held that a co-owner claiming occupation rent must provide specific evidence as to what the market rent for the home would have been.

The Decision

The Court determined that the claim for occupation rent could not be viewed in isolation to the history of how the parties peaceably handled their obligations over the years.

The Court found that the husband had not thought about seeking half his expenses of the home and that the wife had not previously contemplated seeking occupation rent. As a result, the Court felt that an award for occupation rent was not appropriate in these circumstances for several reasons:

  • The wife had not been forced to leave the house. She simply did not like the house;
  • The matrimonial home provided their daughter with a part-time, a full-time, and a summertime residence at various points over the time in question;
  • Although the husband was entitled to claim child support, he had not done so until 2016 because he thought that he and his wife had made “various trade-offs”;
  • Although the husband had the advantage of residing in the matrimonial home, he funded the seven years of mortgage, taxes, and insurance. He had also contributed his own labour and time into improving the property;
  • Had the parties equalized their net family property and transferred title, the wife would not have received any equity from the home;
  • The husband’s efforts had improved the value of the property;
  • The husband had invested his time and money and resided in the home remaining unaware that a claim for occupation rent would be brought forth, and reasonably relied on their previous understanding that the house would be his.

If you are considering a separation, or have already begun the process, and have questions on how to protect yourself, you should consult with a knowledgeably family lawyer before taking any initial or further steps. Mark Feigenbaum is a highly skilled Toronto family lawyer that is able to deliver exceptional representation while remaining sensitive to the costs of family law litigation. Contact Mark online or call him at (905) 695-1269 or toll-free at (877) 275-4792 to book a consultation.