Occupation Rent – The Basics
In Ontario, “occupation rent” is a Family Law concept that actually had its origins in the agricultural and commercial world. It can theoretically apply to any situation where spouses who are co-tenants or co-owners of a matrimonial home have decided to separate, and one of them has physically moved out.
The concept of occupation rent is simple: The spouse who continues to live in the home post-separation (the “occupying spouse”) is responsible for paying fair-market-value rent to the other spouse (the “non-occupying spouse”), for the time period that spans from the separation date until the parties sell the property and divide and equalize their family property as part of the divorce process.
For the spouse who remains in the home, the obligation to pay occupation rent is usually imposed by a court pursuant to the Family Law Act, which authorizes it in the right circumstances, provided he or she has been awarded exclusive possession. (Technically, however, the requirement to pay occupation rent can also arise under the common law, which does not have the exclusive-possession order as a pre-requisite).
Occupation rent is not mandatory in every case; rather, courts have the discretion to order it where the circumstances dictate. There are a number of considerations that a court must take into account, namely:
• the conduct of the non-occupying spouse (including his or her failure to pay support);
• the conduct of the occupying spouse (including his or her failure to pay support);
• delay in making the claim for occupation rent;
• the extent to which the non-occupying spouse has been prevented from having access to his or her equity in the home;
• whether the non-occupying spouse moved for the sale of the home and, if not, why not;
• whether the occupying spouse paid the mortgage and other carrying charges of the home;
• whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid, or was able to pay, child support;
• whether the occupying spouse has increased the selling value of the property.
Note that to balance out the occupation rent the occupying spouse has to pay, he or she will get credit for any expenses that had to paid, such as mortgage payments, utilities and other normal upkeep and household expenses.
Do you have a situation that might call for occupation rent to be paid? It is important to understand the concept, whether you are the one paying the rent or not. At Russell Alexander, Family Lawyers our focus is exclusively family law, offering pre-separation legal advice and assisting clients with family related issues including: custody and access, separation agreements, child and spousal support, division of family property, paternity disputes, and enforcement of court orders. For more information, visit us at www.RussellAlexander.com.