Instruments of Destruction in Divorce or Separation (LTO documents) – Part I

Family Law

We want to talk to you about protecting your property during your divorce or common law separation. You have a house. It’s in joint title. No way your partner can sell the house right? As Kevin Spacey in Superman Returns said, “WRONG!” (well, mostly). Your partner can’t dispose of your half of the house…but they can sever the joint tenancy without you even knowing about it, and then use their half of the house to finance debt so there’s no value in it. Here’s part of s. 18 of the Property Law Act: Rules for transfer and ownership to oneself

  • 18 (1) A person may transfer land to himself or herself in the same manner as to another person, and, without restricting that power, a joint tenant may transfer his or her interest in land to himself or herself.
  • (2) A trustee or personal representative may transfer land to himself or herself in his or her personal capacity.
  • (3) A transfer by a joint tenant to himself or herself of his or her interest in land, whether in fee simple or by a charge, has and is deemed always to have had the same effect of severing the joint tenancy as a transfer to a stranger.
  • (4) A registered owner may make a transfer directly to himself or herself jointly with another, and registered owners may make a direct transfer to one or more of their number either alone or jointly with another.

They can sell it to a third party, who can then apply for partition and sale. If you want more than 50% of the house or you’re looking for a lump sum spousal buyout, or if more than 50% of the house needs to go to pay off debts, or some combination of the above, this could mean trouble for you. So what do you do? The quickest thing to do is probably to hire a lawyer to put together a quick Notice of Family Claim and put a Certificate of Pending Litigation (or CPL) on the title. This lets potential buyers/debtors/mortgagors know that there’s family litigation happening, that one party has declared that they may have an interest in the home, that ownership may change, and that they need to be very cautious about how they proceed. This is particularly so now that the Family Law Act has set the date of separation as the “triggering event” which closed off a potential loophole in priorities that used to exist under the Family Relations Act. There are still some charges, such as builder’s liens, that may be registered. You can place a CPL on any property owned by the other person, even ones that aren’t the matrimonial home. In addition, it may be advisable to get an order under s. 91 of the Family Law Act restraining the other party from disposing or mortgaging family property. This kind of thing can be pretty fact specific, and it’s almost always worth talking to a lawyer when these kinds of issues come up—while we can do damage control, what we’re most effective at is prevention.

For more information, please contact a Family Law lawyer.