Who Pays the Bills During Separations? A Look at Expenses Related to the Family Home
The family home is unique in comparison to other property owned by spouses, and its unique treatment aligns with the important social and economic role the family home plays in most spousal relationships.
When there is a breakdown of such a relationship and separation occurs, one party will usually continue to reside in the family home and the other will seek a new residence. In some cases the former spouses will agree between themselves as to who will remain in the family home, but often the parties disagree and it is left to the Court to decide who should be given interim possession of the family home pending division of property.
Saskatchewan’s Family Property Act sets out a number of factors which are considered by the Court when making an order for possession of the family home. These factors can be grouped into three main categories; first, the Court will consider the best interests of any children affected, second, the practicality and economic justice of the potential order, and third, whether any violence was committed by one spouse again the other, or any children of the relationship.
But ruling on possession only gets us halfway. One party has possession but both parties retain ownership rights, and so the parties are faced with a new problem: who should pay for the costs associated with the family home?
Thankfully, the family property act also provides the Court with broad discretion to add other conditions on an Order granting possession of the family home. The Court can make any order regarding the family home that it sees fit, including fixing the obligation of one spouse to repair and maintain a family home, or to pay for any expenses that may arise out of the occupation of a family home. When making such an Order the Court will consider those same factors used when making the Order granting possession.
When possible, the spouse who has been granted possession will be ordered to take responsibility for paying all expenses related to the family home including payments for utilities, mortgage, and repairs. The reasoning for this is because the spouse who was not granted possession will be faced with paying such costs for the new residence.
However, if the spouse who was granted possession does not have the means to make the payments mentioned in addition to their other living expenses, the Court will often order the spouse who was not granted residence to make those payments. That being said, such an Order is not made lightly as the Court considers it tantamount to an order for spousal support. The Court will require evidence that the spouse granted residence cannot maintain a similar standard of living to what they enjoyed prior to separation unless the non-residing spouse pays the expenses
Although this may seem unfairly beneficial to the spouse residing in the family home, there are also some benefits provided to non-residing spouse. Because payment of expenses related to the family home are classified as a form of spousal support by the Court, the non-residing spouse will be able to claim any payments made for a tax credit. The benefit of the tax credit serves as additional motivation for the payer to make the payments when they might otherwise begrudge paying expenses for a home they are not in possession of.
An Order for payment of expenses related to the family home may be folded into the final order for spousal support and division of property, or it may be discarded. The permanence of such an order varies depending on the facts of the specific case, making the submission made by the parties and their counsel key to the Court’s consideration of the factors above.
For further information, or to discuss what options may be available to you, please contact one of the members of our family law group.