Occupation Rent & The Matrimonial Home

When a couple splits after sharing a matrimonial home, it is common for one half of the couple to remain in the home for some amount of time, especially if there are minor children involved. Parents generally do not want to upend their children’s lives if they don’t need to, and so one parent will commonly stay in the home with the children, while the other parent relocates. Some couples even choose to share parenting of the children in the matrimonial home, so the kids don’t need to go from house to house. Instead, the parents will each have a separate residence and take turns staying with the children in the family home. Of course, this is not something every couple has the resources to manage, but it can be ideal in some situations.

When one half of a couple has remained in the matrimonial home for a long time, especially if there are no young children, the other half of the couple may wonder if they are entitled to some sort of compensation for this time. If a home is fully paid off, for example, and the remaining spouse is not required to take over an existing mortgage payment, should they be required to pay a form of rent to the non-occupying spouse?

What is Occupation Rent and When is it Awarded?

The concept of a spouse paying occupation rent to their former partner for the time they remained in the matrimonial home is known as ‘occupation rent’. The concept, which is set out in s. 17(2)(g) of the Alberta Law of Property Act, states:

(2)  In determining if an accounting, contribution or adjustment should take place or compensation be paid for an unequal division of the land, the Court shall, without limiting itself from considering any matter it considers relevant in making its determination, consider whether

(g)    an occupying co‑owner claiming non‑capital expenses in respect of the land should be required to pay a fair occupation rent; [emphasis added]

While it may seem as though occupation rent would be commonly awarded in a separation or divorce, the remedy is actually used rather infrequently. The principles behind awarding occupation rent were set out by the Saskatchewan Court of Appeal in 2013 in a case called Casey v. Casey:

1. Occupational rent is a remedy which may be utilized to obtain justice and equity in appropriate circumstances
2. The remedy is exceptional and should be used cautiously
3. The following factors, where relevant, are appropriately considered:
   • The conduct of both spouses, including failure to pay support, the circumstances under which the non-occupying spouse left the home, and if and when the non-occupying spouse moved for a sale of the home.
   • Where the children are residing and who is supporting them.
   • If and when a demand for occupational rent was made.
   • Financial difficulty experienced by the non-occupying spouse caused by being deprived of the equity in the home.
   • Who is paying for the expenses associated with the home. This includes who is paying the mortgage and other upkeep expenses (maintenance, insurance, taxes, etc.). If there is no mortgage, occupational rent may be needed to equalize accommodation expenses.
   • Whether the occupying spouse has increased or decreased the selling value of the property.
   • Any other competing claims in the litigation that may offset an award of occupational rent.
4. The remedy is a discretionary one requiring the balancing of the relevant factors to determine whether occupational rent is reasonable in the totality of the circumstances of the case.

Occupation Rent May be Addressed in Other Ways

In a recent decision of the Alberta Court of Appeal, a husband and wife had split in 2004 after more than 20 years of marriage. The divorce award was made in 2018, in which the husband, who had vacated the matrimonial home at the time of the split, made a claim for occupation rent in the amount of $90,000. His claim was based on three factors. Firstly, it was no longer necessary for the wife to stay in the home after 2007 when the children became self-sufficient. Second, the wife had not made any payments towards a line of credit that had been taken against the home. Lastly, it was found that the husband had overpaid spousal support over a number of years. Rather than award occupational rent to the husband, the Court awarded 75% of the value of the home instead. The wife appealed the decision.

The Court of Appeal found no reason to alter the lower court’s decision and dismissed the wife’s appeal. This case demonstrates that while occupation rent may not be a common award per se, courts may find alternative ways to fairly apportion costs relating to the matrimonial home when it comes to the non-occupying spouse in cases where it is warranted.

At Mincher Koeman, our lawyers have the experience and skill necessary to handle any matter involving the division of family property, no matter how complex. We provide knowledgable and candid advice to our clients, working to efficiently traverse the process of valuing and dividing shared property. We will always seek to provide a client with the most cost-effective method appropriate for their given situation. If you are facing the end of a relationship and require the services of an effective family law lawyer for the fair division of your family property, contact our office to make an appointment to discuss your matter by calling us at 403-910-3000 or by contacting us online.