It’s a trend that seems to have become a fact over the last years: in Quebec, half of all relationships end in separation or divorce. In the chaos that follows a break-up inevitably comes the moment when property must be divided up, which often includes the house that was jointly purchased.
Legal documents
Before anything else, you absolutely must ensure that you have in your possession all the legal documents: the title of ownership, the location certificate, municipal and school tax payments, etc., and other contracts related to the property, such as the rental contract for the water heater or water softener, for example.
Under such circumstances, your RE/MAX real estate broker will know which initial steps must be taken should you decide to sell your property according to one of the following scenarios. They will, of course, refer you to a specialized attorney (mediation, matrimonial law, family law, etc.) to prevent, manage or resolve any litigation regarding the legal aspects of the situation.
For a married couple, each spouse is entitled to half of the family assets unless otherwise stipulated in the marriage contract, as the case may be. Two options are open to the couple: one purchases the other’s stake in the property and become sole owner, or the property is sold and the proceeds, after the mortgage has been paid off as applicable, are equally divided (unless there is a pre-existing agreement stating otherwise).
For common-law spouses, a proper contract signed by both parties at the moment of purchase will clearly stipulate who gets how much. In fact, each person must protect their rights when signing the act of acquisition. If the property is exclusively in the name of one of the spouses, the other will not get a share of the proceeds generated by the sale.
Once the separation had been made official, that the details pertaining to cohabitation or to the use of the property have been definitely settled, and that an agreement concerning the payment of expenses such as the mortgage and other maintenance costs has been reached, then you may make the decision to buy back your share or to sell the property.
Amicable Settlements
Unfortunately, amicable settlements are not always possible when it comes to a separation or divorce. When both parties disagree and cannot come to a satisfactory compromise, it may be the case – and often is – that a mediator will be called in to assist or that a judge will have to intervene.
The spouse that will continue to occupy the home until it is sold will take care of the normal ongoing costs unless otherwise agreed.
One the one hand, if both spouses are legal owners and are named on the mortgage loan documents, both are responsible for discharging their debt, unless indicated otherwise. In either case, any decision regarding the payments must absolutely be settled before putting the property on the market and finalizing the transaction.
On the other hand, if only one of the spouses made the initial investment when acquiring the property (the down payment, for example), they may claim that amount out of the family assets, hopefully with supporting documentation. In cases where one spouse already owned the property at the time of the marriage – or cohabitation, for common-law partners – and that the option of selling is being considered, they will receive the entire amount of the proceeds of the sale, unless there is a pre-existing agreement stipulating otherwise.
In the end, each unique situation will come to its unique conclusion, ideally without too much anguish and to each party’s satisfaction. That is why you can never go wrong by asking a RE/MAX broker for their wise advice is such circumstances. Both parties can therefore avoid making any gaffes and unfortunate errors during this time when they are both very vulnerable.