Designating a Matrimonial Home When Property Is Co-Owned With a Third Party

In Ontario, the concept of the matrimonial home is one of the most powerful protections available to spouses under the Family Law Act. The law recognizes that a family’s primary residence is not just a financial asset but also a place of stability, security, and shared life. For that reason, both spouses are given equal possessory rights in the matrimonial home—even if only one of them is on title.

But what happens when the home is not fully owned by one spouse alone? What if the home is co-owned by a spouse and a third party, such as a sibling or a parent? This was the case in a scenario recently debated by lawyers: a wife had lived in the home with her husband since 2003, but the home was legally owned by the husband as a tenant in common with his brother (each holding 50%). The husband and brother wanted to sell the property without the wife’s consent. Could the wife still register a matrimonial home designation? And if so, would it apply only to the husband’s half share or to the entire property?

The Legal Framework: Section 20 of the Family Law Act

The starting point is section 20(1) of Ontario’s Family Law Act, which provides:

“One or both spouses may designate property owned by one or both of them as a matrimonial home, in the form prescribed by the regulations.”

This section makes it clear that designation is available when at least one spouse holds an ownership interest in the property. It does not require sole ownership, nor does it require joint ownership exclusively between the spouses. As long as one spouse has a legal interest—whether a fee simple, a tenancy in common, or even a joint tenancy with someone else—that spouse (or their partner) may file a designation.

Possessory Rights vs. Ownership Rights

• Ownership rights: The husband in our scenario has 50% legal ownership of the property. His brother owns the other 50%. Each has the right to transfer or mortgage their respective share in the ordinary course.
• Possessory rights: The Family Law Act gives the wife equal possessory rights in the matrimonial home, even though she is not on title. This means that neither spouse can unilaterally sell, mortgage, or otherwise dispose of their interest in the home without the other’s consent.

How Designation Works in Co-Ownership Situations

In our scenario, the wife may designate the property as a matrimonial home because her spouse (the husband) owns a 50% share. The designation will attach to his half-interest in the property.

This means:

• The husband cannot sell or mortgage his 50% interest without the wife’s consent.
• The brother technically retains the right to deal with his share, but in practice this is extremely difficult. Any buyer would be purchasing into a half-interest in a matrimonial home occupied by the wife, which is legally complex.

Impact on Real Estate Closings

• Buyer beware: No purchaser can obtain clear title to the husband’s 50% interest without the wife’s written consent.
• Mortgage restrictions: A lender cannot register a mortgage against the husband’s share without the wife’s consent.
• Practical chill on third-party dealings: Although the brother could try to sell his half, the market for such a transaction is minimal.

Final Takeaway

The matrimonial home designation under Ontario’s Family Law Act is a powerful tool that protects spouses from losing their family residence without consent. Even when a home is co-owned with a sibling or other third party, the designation applies to the spouse’s share and effectively prevents unilateral sale or mortgage of that interest.

Disclaimer: This article is for informational purposes only and does not constitute legal, financial, or real estate advice. Consult with a qualified professional for advice on your specific situation.