The Treatment of Cottage Properties Under the Family Law Act
It is common knowledge that matrimonial homes are subject to division under the provisions of the Family Law Act, the statute regulating the property rights of separating spouses. However, fewer people are aware of their rights as it relates to their cottage. Unlike matrimonial homes, cottages often belong to one party alone; they were passed down by family, or purchased using funds from an inheritance. Consequently, many believe they will be able to exclude these properties from division, as is typically the case with property acquired during marriage by gift or inheritance. The reality of the matter is, for many, surprising.
Pursuant to the Family Law Act, if a property was acquired by inheritance but was ordinarily occupied as a family residence at the date of separation, it qualifies as a matrimonial home. As a result, it may not fall within the category of excludable property. In interpreting what is, and is not, a “family residence” the case law is instructive. Courts have typically held that a “family residence” is one around which a couple’s normal family life revolves. Take this to mean that, if you and your spouse regularly or consistently use a property for family vacations over a period of years, it will likely be deemed a family home.
Lengthy absences from a property do not necessarily preclude it from garnering the family residence designation, nor does the ownership and usage of multiple homes, including properties in other countries. Courts look to the intent of the parties when making their determination, and consider how parties maintained their property, whether it was fully equipped as a family home, and if both parties had future plans to occupy is as their primary home.
Courts also require parties to ordinarily occupy the property at and around the time of separation. In instances where parties had not used the cottage jointly for several years prior to separation, either due to extensive renovations being undertaken or their deteriorating marriage, courts have determined that the property is not a family residence. Therefore, even if a cottage could have been considered a family residence at one point in time, if it ceases to have that character in the period preceding separation, it may be excludable from net family property. However, a cottage is not necessarily free from claims from a spouse merely because it lacks the matrimonial home designation. Indeed, in cases where a spouse contributes toward the maintenance or repair of a property, they may nevertheless have a claim against the property.
If you or your spouse own a property, and you seek to clarify your rights as it relates to the property, contact our office to arrange for a consultation.