Mortgage 101 – Implications of the Matrimonial Property Act

Todd Veinotte and Clinton Wilkins are joined by family lawyer Leigh Davis to discuss the implications of the Matrimonial Property Act in Nova Scotia and how The Act generally mandates a 50/50 division of assets upon separation, including the matrimonial home.

Todd Veinotte
Mortgage 101 your guide to home ownership with Clinton Wilkins and myself, Todd Veinotte, and our guest.

Clinton Wilkins
We do have a guest. It’s February the month of love. We’re talking about, loving your home, what happens when the love doesn’t work out, and we’ll introduce our guest again. We have Leigh Davis here from MDW Law in Halifax, and we kind of ended our last segment. One thing I’m very curious about is if separations are down and during the break, Leigh had a couple of comments. So I’m very curious to know kind of what the stats are saying.

Todd Veinotte
What do the stats say?

Divorce Rates and Trends

Leigh Davis
If you’re looking at it on the ground, it doesn’t feel a whole lot different. I think the recent stats that came out were that generally speaking, the divorce rate is down at one of the lowest rates that it’s been since, I think, the 70s. Before that time, the predictions were about 40% generally in Canada overall, with predictions for marriages to end up in separation or divorce. Fewer people are getting married so, that divorce statistic doesn’t feel the same as it did before when there were more people married and fewer people living together long term. All I can tell you is, on the ground, it does feel a whole lot different.

Clinton Wilkins
From my perspective, we deal with a lot of separations. We’re getting the Separation Agreements and we’re getting the court orders, and we’re getting the interim orders. It feels busier right now and I think primarily, some people just fought it out and cohabitated during the pandemic. During 202, there was such a shortage of housing, people needed to live somewhere. Now I think there’s more movement. I think things are moving – at least that’s what I’m seeing on the mortgage side.

Todd Veinotte
And like you said, you’ve seen the dynamic of relationships or of contracts in which people aren’t necessarily married.

Clinton Wilkins
There are so many different living situations and different dynamics, and so many people are cohabitating. Some people are becoming domestic partners in the province of Nova Scotia. They’re going down to service Nova Scotia and say, “Hey, we are domestic partners, and that has some legal rights as well.” We can talk about that but I think what I want to know is, Leigh, what are the implications of the Matrimonial Property Act in Nova Scotia? If let’s say, there’s one of two married people, and one’s on the title and one’s not untitled, do they have any rights?

Leigh Davis
Yeah. I mean, when you get married, you’re opting into that legislation. Or if you register your domestic partnership, you’re opting into that legislation. So, when you are married or you have a registered domestic partnership, the Matrimonial Property Act applies to you. Generally speaking, the starting point in Nova Scotia is that when you’re married or when you have a registered partnership, everything is 50/50. When you separate, that includes the matrimonial home. There are some exceptions to that or some reasons why that might not be the case, but as a general rule, that’s the starting point. There are some rules about both spouses being able to be entitled to have possession of the house, that sort of thing. But it’s different than when you’re a common law couple, because then the ownership of the asset may be more meaningful than when you’re married. When you’re married, it doesn’t matter whose name it’s in. The starting point is that if that’s your family residence, that’s the matrimonial home, both spouses have the entitlement to live there. And again, generally speaking, there’s going to be a 50/50 division of the value of that when you’re looking at the overall division of assets.

Clinton Wilkins
I think that’s probably also why a spouse not on the title has to consent to do transactions like a refinance, whether or not they’re on the mortgage or the title, I get that question so many times. Well, why does my spouse need to sign anything? Yeah, well, because they have the rights under the Matrimonial Property Act. What about other real property that’s not the matrimonial home?

Leigh Davis
It depends. You can, The Matrimonial Property Act also allows for more than one asset to be deemed or categorized as a matrimonial home, but other real property would fall into the same category as other assets, so that your investments, your bank accounts, and things like that. So it’s just another if you have an income property, for example, it’s something to think about, but then again, keep in mind that it has a different tax treatment. Make sure that you’re getting good advice about that because the disposition of the matrimonial home has different tax implications than the disposition of an income property.

Common Law vs. Married Couples

Clinton Wilkins
When we’re talking about things like capital gains, obviously, a big, big impact. Right now, I’ve seen many people that are confused about that. Filing their income tax as common law is the same as being a domestic partner. Can you maybe just clarify what’s what? What kind of rights does somebody have that file their income tax together as common law?

Leigh Davis
Well, I don’t deal with income tax filing so much, but if you’re registered, the part that’s relevant to me in my practice is that if you have a registered domestic partnership, you’re under the legislation of the Matrimonial Property Act.

Clinton Wilkins
So same rights as a married person, basically exactly common-law couples.

Leigh Davis
No, that legislation doesn’t apply. In Nova Scotia, we don’t have any separate legislation for common-law couples relating to property. So, it’s the common law that applies and that’s principles of fairness and equity. It’s a different starting point in that case is not equal division. The starting point in that case is that whoever owns the asset is entitled to the asset and then the other person who wants a share of it, it’s up to them to stake their claim.

Clinton Wilkins
I guess it would be the same when we’re talking about things like health and health concerns. I think there’s a big misconception out there where fewer people are getting married, that they think they’re common law and they have the same rights as a married person after being common law for a certain period.

Leigh Davis
Things like pensions, common-law spouses and married spouses are often treated the same because that’s written into pension legislation differently, but for property rights that would be covered under the Matrimonial Property Act. It’s quite different to be a married person versus common law.

Clinton Wilkins
What about health? You always hear people saying they’ve been in a freak accident, and the girlfriend or boyfriend can’t make any health decisions. It’s then kind of defaulted to kind of the next of kin, blood. How does that impact common law people?

Leigh Davis
For that kind of situation, you want to deal with somebody who’s dealing with personal directives, who’s dealing with wills, power of attorney, that kind of thing. We do have some lawyers in our firm that deal with that, but that wouldn’t be part of my everyday practice, you do want to make sure that when you’re doing planning, whatever that looks like, family planning, generally speaking, whether it’s your finances or in the case of illness or the case of death. I will that you’re thinking about how, what is my relationship with this person, and what are the what’s the legal impact going to be if I die if we separate if I’m not able to make decisions for myself.

Seeking Legal Advice and Transparency

Clinton Wilkins
Nobody wants to talk about their plans. It seems you only want to worry about things when things go sideways, whether it’s a health issue or whether that is a breakdown.

Todd Veinotte
I wanted to ask you quickly before we run out of time about transparency, if somebody wants to seek out counsel should they let the other person know that they’re doing so?

Leigh Davis
It depends. Some people get some advice early. So even when they’re just thinking about whether to decide to separate, sometimes people will come and see us and just get information so that they can make good decisions. When separating, as we’ve already talked about, we’ve only just hit the highlights today. It has wide-ranging impacts on a variety of things that are very intimate and personal to everything.

Clinton Wilkins
Finance, parenting…

Leigh Davis
Exactly! Sometimes it is good to get that advice so that you can make good decisions about moving forward and then whether you share that information with your spouse or former spouse. It just depends on the circumstances. You want to be careful if there are any issues of violence, if there are any issues of any kind of dynamics within the family that might make that a bad idea to share that information. Sometimes people just get that information, they’re just on a little fact-finding mission, rather than pre-deciding or deciding what it is they’re going to do. You may not want to share that shed light on and there.

Todd Veinotte
Maybe times when they have a conversation with you, and afterwards they go, “Man, I’m not going down the road 100% or I’m not ready.”

Contact Information and Closing Remarks

Leigh Davis
I mean, part of my responsibility as a lawyer is to tell people what the alternatives are to separating, and so I take that responsibility seriously. I always inquire whether people are coming to me if they’ve separated or not separated, about whether or not they want to explore the possibility of reconciliation. So that’s important if they do want to separate, then we can help build a road map to how to separate. If it’s an issue, or if they’ve already separated, how to get where they want to go? You can go to our website: MDWaw.ca. You can always check us out there. We’re on Young Street in Halifax, and we’re just opening a new office in Dartmouth, so we’ll be all over HRM.

Todd Veinotte
Clinton. How do people get ahold of you?

Clinton Wilkins
I think the first step is checking us out online at teamclinton.ca/radio, we have hundreds and hundreds of blog posts. You’ll be able to watch our show online after it’s on. You can also check us out on social media. You can see what Todd and I look like and Leigh looks like. Some great advice. I thank you, Leigh, for coming on again. We only scratched the surface. We could do a whole show on matrimonial breakdown!

Todd Veinotte
Leigh, thanks again and great meeting you. Mortgage 101 your guide to homeownership. Thanks for listening.