What Happens To Real Estate During A Divorce?

Divorce is a time of great emotional and financial turmoil. On top of dealing with the loss of a once cherished relationship, you also have to deal with questions like who owns what, and who owes what.

Although around 40% to 50% of marriages in Canada end up in divorce, some separations are more difficult than others. From who will pay the legal fee to how the real estate will be

divided, you have to deal with several contentious scenarios. Even in the best of circumstances, when both partners amicably agree to the dissolution of the marriage, divorce is still a difficult process.

In addition to emotional turmoil, you also have to go through a year of waiting and legal disputes. After you file the separation, you will have to make a list of assets, including property, income, retirement savings, pensions and business holdings.

After this, each party will be required to make a list of their requests and demands, including the optimal plan for their care and concern for children and pets.

In this blog, we have talked about how real estate is divided between a couple after a divorce.

Division Of Real Estate

The assets are divided based on the equalization of the net value of the marital estate. Under Canadian law,

Each spouse is entitled to half of the equity that’s accumulated during the marriage in the property that was used as the family home.

This means that even if only one spouse is on the title or only one spouse holds the mortgage, both parties have a claim to the home’s equity.

Since both spouses have a claim on the family home, in general, four main strategies are used for division. These are:

  • Agree to sell the home on the open market and divide up the proceeds;
  • One spouse buys out the other spouse, thereby owning the property outright;
  • Maintain mutual ownership and turn it into a rental property;
  • Or divide the property into two units where each spouse lives in their own designated space.

In addition to this, both parties are responsible for any costs and expenses associated with this process. Each will pay for half the renovations or upgrades required to put the home on the market.

Who Pays For What?

Before the divorce is filed, the couple has to file for separation and has to start living separately. To save money most couples live in the same house but in separate rooms. However, eventually one of the spouses will have to look for temporary rental accommodation elsewhere.

This is when both spouses must come to some agreement on who will pay for what, and when. Generally, both parties keep financing the mortgage payments and cover household expenses.

During this process, we see that many arguments arise. Usually, the spouse that leaves the house stops making mortgage and housing payments. However, at this point, it is important to understand that even if you both agree that your spouse will keep the house, as long as your name appears on the mortgage, you are legally responsible for that debt.

Is Inheritance Divided?

As long as you can prove that the asset is your inheritance, it is not included in the marital estate. However, during the time of legal separation, you will have to show the trail that traces your inheritance.

Even if you receive the inheritance during the course of the marriage, it does not have to be part of the divorce equalization formula.


Divorce is a stressful situation for all family members. Most people find it difficult to be objective and practical. Hence, to ensure that you don’t face any monetary loss, it is best that you hire an experienced family law lawyer.

Contact Us

Contact Peak Family Law if you require professional assistance with family law matters. You can visit our website here or contact us for more information.

For Consultation

Contact Us Today