Navigating Property Rights: When is a Cottage a Matrimonial Home in Ontario?

In Ontario, understanding the concept of a "matrimonial home" is crucial when addressing property division during separation or divorce. While the primary family residence is often assumed to be the sole matrimonial home, other properties like cottages or vacation homes can also fall under this designation in specific circumstances. This means it's possible for spouses to have more than one matrimonial home at the time of separation. This article will explore the factors that determine whether a cottage or other property is considered a matrimonial home, and the significant legal implications of such a classification.

Under the Ontario Family Law Act ("FLA"), a matrimonial home is defined as any property in which one or both spouses have a legal interest and which was, at the time of separation, ordinarily occupied by the spouses as their family residence. This designation carries substantial legal weight, particularly concerning rights of possession and the eventual division of property.

A cottage or vacation property can indeed be considered a matrimonial home if it meets these criteria. The key factor is whether the spouses "ordinarily occupied" the cottage as a family residence. This doesn't necessarily mean it had to be their main dwelling. Regular and significant use by the family can be sufficient. For instance, if a family consistently spent summers at the cottage and it served as a regular gathering place, it may well be deemed a matrimonial home. Conversely, if the cottage was rarely used by the family or primarily by only one spouse, it's less likely to be classified as such.

The legal implications of a secondary property being designated as a matrimonial home are twofold. Firstly, it impacts rights of possession. In Ontario, both spouses have an equal right to possess a matrimonial home, regardless of whose name is on the title. This means that neither spouse can unilaterally exclude the other from the property, sell it, or place any encumbrances like a mortgage on it without the other's consent or a court order. Secondly, this classification affects the division of property upon separation. The value of a matrimonial home is treated differently from other property when equalizing net family property. Most notably, if a spouse owned the matrimonial home on the date of marriage, they cannot deduct its value as a "date of marriage asset." This can have substantial financial repercussions when calculating equalization payments.

It is important for spouses to understand these rules as they navigate separation. Equally vital is for those considering marriage to understand the potential implications for properties they own or may inherit. A domestic contract, such as a Marriage Contract (often referred to as a "Prenup"), can be a valuable tool to protect individual interests in such properties.