Section 21 (1) of the Ontario Family Law Act stipulates that “no spouse shall dispose of or encumber an interest in a matrimonial home unless,
(a) the other spouse joins in the instrument or consents to the transaction;
(b) the other spouse has released all rights under this Part by a separation agreement;
(c) a court order has authorized the transaction or has released the property from the application of this Part; or
(d) the property is not designated by both spouses as a matrimonial home and a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled.”
This provision means that if a person is married, he cannot simply sell or mortgage the matrimonial home without the spouse’s consent. The rationale behind this law is to protect individuals from disposing an interest in a matrimonial home unilaterally. This law applies even in the case where only one spouse holds the title of the matrimonial home. However, if the couple has resided in a property where neither of them has an interest, e.g. a spouse’s parents’ home, then it is unlikely that section 21 (1) would apply, as the property would most likely not be deemed as “matrimonial home”.
This explains why your banker and real estate lawyer requires your spouse’s consent before giving you a mortgage and registering a mortgage on the title. Other properties other than the matrimonial home will be dealt with according to ownership. However, to err on the side of caution, most real estate lawyers would require spousal consent form signed by your spouse before registering a mortgage even on non-matrimonial homes.
If a party obtains a mortgage without the spouse’s consent, the spouse can potentially ask the court to set aside the mortgage transaction. If the party claims that the spousal consent is not required, the party has to prove that the property is not a matrimonial home by making a statement verifying that (a) he or she is not, or was not, a spouse at the time of the disposition or encumbrance; (b) the person is a spouse who is not separated from his or her spouse and that the property is not ordinarily occupied by the spouses as their family residence; (c) the person is a spouse who is separated from his or her spouse and that the property was not ordinarily occupied by the spouses, at the time of their separation, as their family residence; (d) a designation of another property as a matrimonial home, made by both spouses, is registered and not cancelled; (e) the other spouse has released all rights under this Part by a separation agreement. The statement is deemed enough proof that the property is not a matrimonial home unless the person to whom the disposition or encumbrance is made had notice to the contrary. If you are dealing with a Family Law Matter, contact our experienced Family Lawyers at MEHDI AU LLP today.
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