By Peter Ewanchuk
When couples split up after sharing a matrimonial home, one will often stay in the residence while the other rents or buys a new property. As a result, the spouse who moves away will usually face higher costs since they will be paying rental costs or payments on a mortgage on their new residence. In that scenario, the spouse residing in the matrimonial home could be requested by the court to pay what is known as occupation rent.
A concept rooted in common law
The idea of matrimonial home occupation rent comes from the common-law principle that property co-owners have an equal right to use and occupy it. If one of them is removed from the property, the non-occupying co-owner may be entitled to occupation rent, a discretionary remedy granted by the Courts in limited circumstances. This concept has been codified by s. 17 of the Alberta Law of Property Act, which states that “In making an order, the Court may direct that
- an accounting, contribution and adjustment, or any one or more of them, take place in respect of the land, and
- compensation, if any, be paid for an unequal division of the land.”
In addition, it is within the court’s discretion to grant occupation rent as an equitable remedy if circumstances of unjust enrichment are present. In order to successfully claim occupation rent as an equitable remedy, it must be demonstrated that the person in possession of the home has been enriched and that there has been a corresponding deprivation suffered by the other person entitled to the property in the absence of a legal reason for the enrichment.
Occupation rent is a defensive move
Occupation rent is usually only claimed by a spouse as a defensive move, countering the actions of the other ex-partner. Indeed, in most cases the court will not make an award of occupation rent unless it is claimed in response to a claim for contribution to the costs associated with the matrimonial home by the occupying spouse. For example, perhaps the spouse in the matrimonial home wants their ex-partner to pay a portion of the mortgage, property taxes and other expenses related to the house.
The non-occupying spouse may then raise a counter-claim for occupation rent.
Alberta courts will consider a number of factors when determining the appropriateness of an order for occupation rent. They include:
- the conduct of either spouse, including the failure to pay support;
- delay in making the claim;
- the extent to which the non-occupying spouse has been prevented from having access to their 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 reside with the occupying spouse and, if so, whether the non-occupying spouse is paying child support; and
- whether the occupying spouse increased the selling value of the property.
Generally speaking, a claim for occupation rent will likely succeed if the occupying spouse has taken a tenant and is financially benefitting from their rental payments. The amount of the occupation rent will likely be a percentage of the rental funds received from the other third-party tenant.
Occupation rent rarely granted
Occupation rent is not commonly awarded in Alberta. The reasons for that are discussed in a 2001 Queen’s Bench of Alberta decision involving a couple that lived together for eight years. Thirteen years after they separated, the wife sought a division of the matrimonial assets, including occupation rent from the husband.
As the trial judge noted, “The concept of ‘occupation rent’ is a common-law attribute of the joint ownership of property. At common law, all joint tenants have an equal right to the occupation of the whole of the premises, and neither had the right to exclude the other.”
Prefacing his denial for her claim of occupational rent, he noted, “care must be taken in carrying forward the common-law concept of occupation rent into the family law context. Non-family joint tenants generally do not have mutual obligations of support for each other, and for children. In the family law context, such mutual obligations of support are generally present, and would usually dominate and outweigh the common-law property rights associated with joint tenancy. Occupation rent should only be awarded in the family law context with great caution.”
There are other remedies
Rather than grant occupation rent, the court can consider other remedies. That is shown in this 2020 Alberta Court of Appeal decision involving a husband and wife who had split up after more than 20 years of marriage. The husband left the matrimonial home and made a claim for occupation rent of $90,200, based on three factors:
- it was no longer necessary for his ex-wife to stay in the home when the children became self-sufficient;
- she failed to make any payments towards a line of credit taken out against the home; and
- he had overpaid spousal support over a number of years.
Rather than award occupational rent to the husband, the trial judge awarded 75 percent of the value of the matrimonial home to the husband, a decision the appeal court upheld.
Call us for assistance
Claims for occupation rent are rarely granted as the court prefers to apply principles of spousal support to appropriately compensate the parties. As a result, you may wish to discuss matters with a lawyer prior to leaving the matrimonial home as it may be more beneficial for you to elect to stay and have your spouse vacate the premise. If you think you have grounds for a claim, or you simply wish to discuss the concept with a knowledgeable professional, the team at Demas Schaefer Family Lawyers can explain your rights and options. Set up an appointment with one of our experienced family lawyers today. We offer a free 15-minute telephone or video consultation so you can see how we can help.