Property Division, Sharing & The Matrimonial Home

The Tanking Ontario Real Estate Market – How is Divorce Impacted?

real estate market divorce
Written by Russell Alexander / (905) 655-6335

Lately, there’s been a lot of economic volatility: Prices on everyday items like food and gasoline are going way up. Interest rates are on the rise. And the Ontario real estate market is starting to trend noticeably downward.  

This volatility can have a big impact on ongoing divorce cases. 

For one thing, higher interest rates might affect each spouse’s ability to get a mortgage on a newly-purchased home to live in, post-split. For parents, this can also impair the feasibility of any plan for one of them to stay in the house with small children after separation.  

But for most couples, the recent downshift in the real estate market will have the most profound impact. This is because a key component of any divorce is the process of dividing up the value of the matrimonial home – which can only be done once its market value has been determined. If that value fluctuates over time, then setting this figure becomes like a moving target.  The challenge gets even worse if the spouses’ divorce process takes months – or years – to complete. 

Delays in selling the home can also be problem, especially if one spouse is deliberately dragging their feet just as the market starts to turn. This was the case in George v. Wang, where the common-law spouses had reached a mediation agreement that required the wife to buy the husband’s 50 percent interest in the property, at a cost to her of $850,000. However, she wholly failed to comply, apparently blaming it on the fact that the husband had been sending her emails and texts that she considered threatening.  She alleged that these somehow interfered with her ability to obtain financing.

But even worse, the wife actively thwarted any attempts to sell:  She delayed in signing the listing agreement, did not get the property ready for sale, and interfered whenever agents tried to show the property to prospective buyers.  She even refused to allow the agents to put a “for sale” sign on the property. And when the original listing price generated no offers, she refused to lower it. 

In the meantime, the value of the matrimonial home dropped by $400,000. The husband eventually got a court order allowing him to sell it immediately, without the wife’s consent, for $2,300,000. After dealing with the mortgage this left about $1,210,000; this was paid into court in trust, and still had to be dealt with. 

 In untangling the financial fallout of the delay in selling, the court blamed the wife entirely. She never made any good faith attempt to provide the $850,000 buy-out price, and was deliberately stalling. As the court put it: “the alleged $400,000 reduction in fair market value lays squarely at [her] feet”.

In the end, the court granted the husband’s request to move the matter along, by having half the net sale proceeds (about $600,500) released to him. The financial impact of the wife’s delay tactics, and the financial repercussions of the loss in the home’s value, would be taken into account as part of the final stage of proceedings, which was scheduled for at a later date.

As this case shows, any market-driven fluctuations in the value of a matrimonial home – whether upward or downward – can be a big problem for former spouses (and for their lawyers). A dramatic downward slide is obviously the worst-case for everyone:   Not only is the sheer loss in value a financial concern, but it can also affect any divorce negotiations that are already underway when the value starts to plummet. The calculations can get tilted, and uproot the very foundation of the prior settlement discussions. 

The good news is that if you are going through a divorce and are concerned about the falling real estate market, we may have some solutions for you. One of them, for example, is to negotiate a future payment between you and your spouse that must be made only once your home is actually sold, and its value locked-in. (But this requires a great deal of trust between the two of you; otherwise it can make the matter worse by giving you one additional disputed matter to resolve). 

Feel free to give our offices a call, to discuss your specific situation. 

At Russell Alexander Collaborative Family Lawyers, our focus is exclusively divorce & family law. Learn more at

Full text of the decision: George v. Wang, 2020 ONSC 6175 (CanLII)

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About the author

Russell Alexander

Russell Alexander is the Founder & Senior Partner of Russell Alexander Collaborative Family Lawyers.