Occupation Rent After Separation: Finding Fairness When One Spouse Stays in the Matrimonial Home

Following a separation, one spouse may continue to reside in the matrimonial home, with the other spouse finding alternative accommodation. The non-occupying spouse may seek occupation rent as compensation for the other spouse’s exclusive use of the home. But there may be further considerations, such as the occupying party assuming full responsibility for mortgage payments. Ultimately, this is a discretionary remedy that can be used to ensure financial fairness between the spouses.

Occupation Rent Is a Discretionary Remedy

In Osituyo v. Falana, the parties divorced, leaving several issues for trial. One of those concerned the treatment of the matrimonial home. The parties jointly owned the home and were both liable for the mortgage. Following the parties’ separation, the applicant remained in the home for 18 months, although he failed to keep up with the mortgage payments. He subsequently vacated the property, which became subject to foreclosure proceedings. The only real points of contention related to the foreclosure proceedings and the respondent’s claim for occupation rent. The judge reviewed the monthly mortgage payments and found that the applicant should be credited for covering the respondent’s one-half share of the property’s costs, up to the time he stopped making mortgage payments, for a total credit of $8,933.04. The applicant also claimed to have paid condominium fees, utilities, and house insurance, and the judge also awarded him a credit for one-half of the amount for six months, totalling $2,684.49.

The judge acknowledged that occupation rent is a discretionary remedy and can be used “as a tool for balancing competing equities”.

Factors Courts Review When Assessing a Claim for Occupational Rent

In Saroli v. Saroli, Justice Petersen emphasized that a claim for occupation rent cannot be considered in isolation. Instead, the financial affairs of the parties need to be considered, and occupation rent may be a remedy that can ensure there is “financial fairness” between the spouses. The judge went on to explain that the circumstances that need to be considered when assessing occupation rent will vary in each case. However, Justice Petersen set out a list of common factors:

1. The timing of the non-resident spouse’s claim for occupation rent;
2. The circumstances under which the non-resident spouse left the home;
3. The duration of the exclusive occupancy;
4. Whether the non-occupying spouse moved for the sale of the home;
5. The inability of the non-resident spouse to realize on their equity in the property;
6. Any financial hardship experienced by the non-resident spouse as a result of being deprived of their equity in the property;
7. Any reasonable credits to be set off against occupation rent for expenses associated with the home;
8. The conduct of both spouses, including any failure to pay support;
9. Whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid child support;
10. Whether the occupying spouse has increased or decreased the selling value of the property; and
11. Any other competing financial claims in the litigation.

Court Considers Lack of Other Support Paid by Occupying Spouse

Looking at those factors, the judge in Osituyo determined that the applicant should pay occupation rent for 18 months while he was the sole occupant of the home. But there was a valuation problem, since neither party provided an occupation rent report. Further, the applicant did not attend the trial, so there was no way to identify the parties’ respective positions on the potential rental value. The only benchmark that the court could refer to was the rent expense that the respondent incurred when she left the property, as set out in her financial statements. This amounted to $2,020 a month. However, the judge noted that additional relevant information was missing, since there was no evidence comparing the two residences. Justice Breithaupt Smith contrasted this with the circumstances in Delongte v. Delongte. In that case, the court was provided with comparable property rental listings that could help set the appropriate value of the occupation rent.

Nevertheless, even in the absence of evidence, the judge felt it would be inequitable not to compensate the respondent. Firstly, she remained liable on the mortgage, even though the applicant failed to comply with his undertaking to keep it in good standing. And it was important that, since she was a joint mortgagor, she was not simply liable to pay half of the outstanding balance; both parties were equally liable for the entire sum. Moreover, the respondent paid rent for 18 months after she moved to her own accommodation, while the applicant stayed in the property, paying nothing for that period and not paying the respondent any child support.

Evidence of Market Rental Rates Will Assist the Court

Justice Breithaupt Smith looked to a Saskatchewan Court of Appeal case. In Casey v. Casey, the Court reviewed a trial decision ordering occupation rent despite no expert evidence being available. In fact, the judge relied on Peltier v. Peltier, where the judge decided to “simply apply some common sense” in the absence of suitable evidence. But in Casey, the appellant found fault with the amount ordered, as there was no evidence to establish the rental rates. But the Court did not accept that an expert is required for a claim for occupation rent to succeed. The Court agreed that it is preferable to have that evidence, but courts have not consistently held that an expert is required for a claim to succeed.

Those comments were applicable in this case, where there was no evidence of comparable rental rates. Nevertheless, Justice Breithaupt Smith determined that the appropriate equitable remedy was to deny the applicant credit that he would normally be entitled to for the respondent’s one-half contribution to the carrying costs of the property for the time he resided there. The judge found that to “do otherwise would be to presume that it is not possible to have rented the matrimonial home at a break-even point”. And such a conclusion would favour the applicant, even though he had failed to abide by multiple court orders.

Contact Johnson Miller Family Lawyers in Windsor-Essex for Trusted Advice in Matrimonial Home Disputes

Disputes over occupation rent often arise at an already difficult point in a separation, particularly where one spouse remains in the matrimonial home while the other continues to carry financial obligations or loses access to their equity. Because occupation rent is a discretionary remedy, outcomes can vary significantly depending on the facts, the quality of the evidence, and how competing equities are framed.

The experienced family lawyers at Johnson Miller Family Lawyers help clients assess whether an occupation rent claim is likely to succeed, identify relevant credits or set-offs, and present the financial context that Ontario courts expect. If you are facing a dispute involving exclusive possession of the matrimonial home or a claim for occupation rent, obtaining early legal advice can help protect your financial position and avoid costly missteps. Contact us online or call 519-973-1500 to discuss your post-separation property issues.