Selling the Matrimonial Home: Is $37,000 for Home-Staging and Prep-Costs Reasonable?
In a recent Ontario case the couple, both of whom were physicians, separated after a 31-year marriage. The wife remained in the matrimonial home while the parties prepared to divide their assets, which included a property in Italy, several automobiles, expensive jewellery, and several joint accounts.
As part of this division process, the home was scheduled to be sold on September 1st. However, when the husband’s friend visited in late August to retrieve certain items for him, he noticed that the wife had not prepared the home for the new occupants as she was obliged to do. In particular, the home was in disarray, there were still boxes everywhere, and more than 100 bottles of valuable wine – collectively worth about $200,000 – still remained on the premises.
As a result, the deal fell through for the September 1st closing. The wife also stalled subsequent efforts to sell it, by being difficult in connection with signing back various offers from the potential buyers. Eventually, the house did sell for a reduced price of $2.2 million, which represented a $250,000 shortfall from its true market value. (And this was achieved only after the husband agreed under some duress to sign a document committing to pay the wife $125,000, in order to compensate her for the shortfall in the selling price. This purported agreement was ultimately struck down).
Against this background, and in the context of dividing up the proceeds of the sale, the wife submitted her expenses in the form of a bill for almost $37,000. This included a home staging fee, and the cost to hire cleaning staff and assorted others to help with getting the home ready. It also encompassed the fees charged by various physicians whom she apparently hired to replace her at her medical practice while she was involved in preparing the home for sale.
The court was asked to rule on whether this $37,000 fee was reasonable.
The wife’s success was mixed: The court found that she was entitled to 50% of the expenses –but only for those items that were supported by invoices. She was not entitled to the costs of hiring replacement physicians to cover her absence at work, as she had failed to prove that her absences were directly and exclusively related to the time needed to prepare the home for sale. In fact, the court lamented that the wife had fallen far short of her obligation to provide either oral testimony from those people she claimed had provided services, or at the very least, documentary evidence in the form of receipts. Failing either of those, she should have provided the court with an explanation as to why this evidence was not available.
In the end, the wife was awarded only about $9,000 in total to cover her claimed expenses.
For the full text of the decision, see
Golda v. Syty-Golda, 2012 ONSC 6320 (Ont. S.C.J.)
