In a recent Ontario case, the court ordered for the sale of a matrimonial home, finding that the matter was urgent on the basis on the financial difficulties faced by the owners due to the COVID-19 pandemic.
The husband and wife married on February 14, 2010; they separated on September 12, 2018; and they were divorced on April 16, 2020.
Since October 1, 2018, the wife had been living in the matrimonial home and the husband had been living elsewhere. The property was owned in joint tenancy by the parties.
The balance on the mortgage held by their bank was $560,498. The husband owed over $24,000 to the wife for his share of arrears on the mortgage payments.
The couple had entered into minutes of settlement in 2019 in which they agreed to arrange for the sale of the home, but had been unable to do so. Their bank had threatened power of sale proceedings unless the mortgage was brought into good standing.
The carrying costs on the home were approximately $4400 per month, including the mortgage payments.
Since March 15, 2020 the wife had not earned income from employment. Her sole source of income was $2000 per month in government assistance during the COVID-19pandemic.
The husband equally had no income from his restaurant business because of the pandemic. He also received $2000 monthly in government assistance during the pandemic.
The wife went to court for an order that the husband consent with her to an arrangement with their bank to defer mortgage payments for six months and that the property be listed for sale with a real estate agent. Alternatively, the wife requested an order that the husband jointly consent to the immediate listing for sale of the property with the real estate agent.
First, the court had to determine whether the matter was urgent, as normal court proceedings have been suspended due to the COVID-19 pandemic unless the court determines that the matter is in fact an urgent one.
The court determined that the matter was urgent, stating:
“I am satisfied that the [wife] has demonstrated that her motion is urgent. Her small income and the large mortgage on the matrimonial home justify the bringing of her motion on an urgent basis. She is entitled to seek an end to her dire financial circumstances by moving for an order to end her obligation in relation to the carrying costs of the property and to secure payment for any equity she may have in the property.
Further, the [husband] has demonstrated no basis for denying her the relief she seeks. There is no evidence that she has behaved maliciously, oppressively, or vexatiously in relation to the [husband]; nor has he shown that any realistic alternative exists under present circumstances to the sale of the property. He is unable to pay the carrying costs on the property; he has been unable to complete a contemplated buy-out of the [wife]’s interest; he is unwilling to sell the property expeditiously; and he now proposes a plan lacking detail and the necessary credibility, to take over the property and rent it to cover the carrying costs.”
The court then explained that because the couple was divorced, family law rules did not apply regarding the sale of the home. Instead, s. 3 of the Partition Act would apply, under which the wife,as a “person interested in land”, could bring an application for sale of the property under the directions of the court.
As a result, under the Partition Act, the court ordered that the property be immediately listed for sale with the real estate agent; that the parties agree with their bank to defer the mortgage to allow that sale and for up to 6 months; that the signature of the husband on any documents related to the sale be dispensed with; and that the proceeds from the sale be held in the trust account of the real estate lawyer who acts on the sale pending the agreement of the parties or order of a judge of this court.
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