We are all familiar with the skyrocketing price of homes in Toronto and the surrounding area. It is not a simple feat to purchase a home – it requires a lot of hard work and obviously, money.

Picture this: you work your way through school, spend years in full-time employment, finally earn enough income to secure a home, make mortgage payments on your own for several years, meet your partner, marry said partner, separate from said partner, and then you lose a large portion of equity in your home to that partner.

For many, this is an unfortunate reality and the reason why is something our clients should be aware of, given that the family home is most often a couples' most significant asset.

In Ontario, there are special rules in respect of the treatment of the matrimonial home upon marriage dissolution. The Family Law Act defines a "matrimonial home" as follows:

"Every property in which a person has an interest and that is or, if the spouses have separated, was at the time of separation ordinarily occupied by the person and his or her spouse as their family residence is their matrimonial home."

It is important to note that a couple can have more than one matrimonial home. A cottage for example, ordinarily occupied by both spouses, can be a matrimonial home. A hunting cabin only ever used by one spouse on the other hand would not be considered a matrimonial home.

Under the law in Ontario, a couple's property is not divided upon separation, but rather, the value of that property and more specifically, the growth in value of property that spouses share is divided. What this means is that if the title to the matrimonial home is in your name (perhaps you owed it before the marriage), it stays in your name (subject to some claims your spouse could make if he or she made significant contributions to the property), but your spouse has a right to claim a share in the value of a matrimonial home as part of an equalization payment dividing property.

Absent a marriage contract, the entire equity in a matrimonial home is always included in the value of assets that married spouses share. With almost every other type of asset, spouses only share in the growth in value during the marriage. Take for example an art collection – purchased by both spouses – this is something you and your partner would share the wealth in. The matrimonial home on the other hand is not. Section 5(2) of the Family Law Act does not allow a spouse to get any credit for bringing a property into the marriage if that property was a matrimonial home on the date of separation. So, without a marriage contract, a couple will share whatever value is in the matrimonial home.

Unless the matrimonial home is jointly owned, there is no right to "half" the home but instead, a right to have whatever equity lies within the home included in property/asset division.

In terms of possession of the home, both spouses have an equal right to possession pursuant to section 19 of the Family Law Act. What this means is that one spouse cannot unilaterally exclude the other from the matrimonial home, even if they own it. A spouse (whether on title or not) can also apply to the court for exclusive possession of the matrimonial home (s. 24 of the Family Law Act). A court order for exclusive possession has the effect of excluding a spouse from the property for a period of time as determined by the court.

If you are planning on getting married and own a home, you may want to consider putting protections in place and these protections would come in the form of a marriage contract. A marriage contract – entered into in anticipation or marriage or after a marriage has already happened – can exclude the matrimonial home from a spouses net family property. This would have the effect of the spouses not sharing in the equity in the home on date of separation. If the marriage contract is done properly, which requires the help of a lawyer, then judges usually think that giving a spouse credit for bringing the home into the marriage is fair.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.