Before getting a divorce, it is unlawful to sell your home in Alberta without consent from a legally married spouse. The consequence of listing, leasing, or transferring your property without consent could be the court awarding your spouse half the home’s fair market value.
If you want to sell your home in Alberta before, during, or post-divorce, below is what you need to know.
- You may make your own agreement when dividing marital property during a divorce.
- If you are going through a divorce or separated from your spouse, you can sell the home if you have written consent.
- You do not need written consent to sell property acquired before or after the marriage. The rule only applies to matrimonial property.
- You may buy out your partner’s share of the property before selling a home in Alberta.
- A prenuptial agreement tells you who gets what after a divorce.
- The court will use Alberta’s Matrimonial Property Act to distribute the property if you do not have a prenuptial agreement.
- Alberta’s matrimonial property act only applies to legally married couples.
- Alberta’s Adult Interdependent Relationships Act applies to unmarried couples.
- If you decide to sell your home during a divorce in Alberta, a percentage of the proceeds will go to the existing mortgage, agent fees, property taxes, and related expenses.
- It is best to consult a divorce attorney.
- After divorce proceedings are finalized, you may sell the home.
Can I sell a house during a divorce in Alberta?
Under Alberta’s Dower Act, homeowners in the province must inform their legally married partner before listing or selling a home. What would happen if you sell your home without consent from your partner is that the court could award half the property’s value to your spouse. So what is the dower act?
Your spouse gets dower rights if you are:
(1) Legally married.
(2) The homestead’s title only contains one name.
(3) If you have lived on the property at any time during the marriage.
Who gets to stay in the home during a divorce in Alberta?
If you are going through a divorce, it is vital to understand who gets what before you list or sell your home in Alberta.
To determine who gets what, the questions the court will ask include:
Is there a prenuptial agreement?
A prenuptial agreement is a contract written by the spouses before marriage. The agreement lists each partner’s property and debts and specifies who gets what after divorce.
Your prenuptial agreement may contain:
- A provision on how property will be divided in case of a divorce.
- A waiver of alimony.
- Debt protection
- Distribution of property to children after divorce.
What happens if you do not have a prenuptial agreement?
If you intend to sell the home during a divorce and the property title is in your name, your spouse has dower rights. Consequently, if the spouse does not sign a dower release or dower consent form, you may owe the individual half the property’s value.
What is vital to remember is that only legally married persons qualify for dower rights in Alberta.
Also, Alberta’s family property act states that, quote:
“Nothing in this Act confers a right on a spouse who at the time of marriage knew or had reason to believe that the marriage was void.”
Alberta’s matrimonial property act explained: What happens to matrimonial property during a divorce?
Under Alberta’s matrimonial property act section 3(1) You may apply for a matrimonial property order if, quote:
“(a) the habitual residence of both spouses is in Alberta, whether or not the spouses are living together, (b) the last joint habitual residence of the spouses was in Alberta, or (c) the spouses have not established a joint habitual residence since the time of marriage but the habitual residence of each of them at the time of marriage was in Alberta.”
If the divorcing couple cannot agree on how to distribute the property or if there is no prenuptial agreement, the court will apply Alberta’s Matrimonial Property Act. Alberta’s Matrimonial Property Act only applies to legally married couples. It does not apply to common-law relationships and cohabiting persons.
Under the property act, the “matrimonial home” refers to
(1) The home/dwelling as a whole or in part.
(2) Mobile homes.
(3) Condominiums, suites, or apartments.
What factors does the court consider when awarding matrimonial property in Alberta?
If the divorcing couple cannot agree on how to share property, the court will consider the following factors:
- Each partner’s contribution to the marriage.
- The length of cohabitation/marriage.
- Any Agreement made by the parties.
- The financial situation of both spouses and the best interests of dependents (Child support payments & spousal support payments)
- Amount contributed to mortgage payments.
- Is it the marital home?
- Existing court orders.
- Tax liabilities the owner may incur while selling or transferring the property.
- Improvements made to the home by each spouse.
This means that the property split isn’t always 50/50. For example, if one partner paid more towards the mortgage or financial upkeep during the marriage, they may be awarded more. Additionally, if one spouse is taking more in terms of other assets (vacation home, cars, liquid assets, etc.), the other spouse may be given more money during the home sale.
How do I get exclusive property possession in Alberta?
If you cannot agree on who gets the home, either party may apply for exclusive possession of the home in Alberta. An exclusive possession order tells you who stays in the house and how assets are divided.
Can you sell a home in Alberta if you have exclusive possession?
In Alberta, exclusive possession orders could be temporary (until the divorce settlement is finalized) or permanent. What is vital to remember is that exclusive possession does not give you the right to sell the home without the consent of your former spouse.
How to sell your home during a divorce in Alberta
To avoid a potential lawsuit or drawn-out court battle during a divorce in Alberta, this is what you must do:
- If you own the property and your partner has dower rights, get them to sign dower consent or release before you list or sell the property.
- If divorce proceedings are not finalized, notify your spouse of your intention to sell and make sure that they sign all documentation required to sell the property. In addition, we recommend consulting with your REALTOR® or lawyer.
- Make sure that no one lives on the property at the time of sale and that you have an agreement with your spouse over the sale (everything should be in writing).
- Negotiate the proceeds before listing the property. For example, if you both agree to sell the home, negotiate who gets what before the sale.
How to divide property during a divorce in Alberta
As mentioned, before you list property in Alberta, it is vital to understand who gets what. To that end, we recommend that you follow these steps:
1. Create a list of all properties you own and family property
Your list should contain the property you owned at the beginning of the marriage, property acquired throughout the relationship, property bought after separation, and properties outside Alberta.
Creating this list is important during divorce proceedings because the court will not consider property bought before and after separation as family property. However, property acquired during the marriage is family property and may be divided as per a prenuptial agreement or equally if there is no prenuptial agreement.
2. Get a property valuation/appraisal
A property valuation tells the court the current value of the property. For a family home, you may hire a property appraiser.
Do you need a property appraisal for your home during a divorce in Alberta?
Yes. A judge may ask the divorcing couple to get a property appraisal during a divorce. The results of an appraisal are useful during property division, and it helps to determine what one must pay to the other’s equity interest.
If you want to guarantee equal division of the property, you should get a property appraisal.
3. Provide property financial disclosure
During a divorce, you must disclose a list of properties you own in and outside Alberta to your spouse. If you do not, your partner may file a “Notice to Disclose Application,” forcing you to disclose all your properties, including ones you disposed of within the last year.
Remember, you disclose your property under oath, meaning there could be legal consequences if you file a false financial disclosure.
4. Categorize your property
As mentioned, properties bought before marriage and after separation are not family property. Consequently, it is in your best interest to categorize the properties into three categories.
- Personal property/exempt property. This refers to properties that will not be divided with your former spouse. Again, we recommend consulting with a divorce attorney when categorizing.
- Property that will be divided unequally. Some properties are divided based on what is fair. When dividing this type of property, the court will consider the length of the marriage, existing court orders, the contributions of each spouse, the best interest of dependents, and the divorcing parties.
How is a family home split during divorce in Alberta?
Alberta’s matrimonial property act section 7(4) reads, quote:
“If the property being distributed is property acquired by a spouse during the marriage and is not property referred to in subsections (2) and (3), the Court shall distribute that property equally between the spouses unless it appears to the Court that it would not be just and equitable to do so, taking into consideration the matters in section 8.”
The act requires the court to consider the following when distributing property:
- Contributions (financial/other forms) made by each partner.
- The spouse’s income, earning capacity, obligations, dependents, and financial resources.
Typically, the court will distribute the family home, pensions, vehicles, and investments equally unless the distribution is unfair or an existing agreement or court order exists.
Selling a home during a divorce in Alberta: What to remember
- Before dividing sales proceeds, you must pay your mortgage and all related expenses, including capital gains tax.
- You may negotiate a buyout with your spouse during divorce if you want to keep the home. You may take out a new mortgage, give up marital property, or pay in cash. We recommend getting a property appraisal.
- You may sell the home and split proceeds equally or as negotiated.
Reasons to sell your home during a divorce in Alberta
Some advantages of selling your home during a divorce in Alberta include:
Avoid financial burden
If both spouses contribute to the home’s mortgage, paying the mortgage on your own can become a burden. Add to that insurance, property taxes, and related expenses, and selling the home could be the best option.
To avoid legal battles
Distributing joint property may lead to a long and expensive court battle, and in the end, it is up to the judge to decide who gets what. Selling the property and distributing the proceeds is more straightforward, cheaper, and faster.
How to sell your home during a divorce in Alberta
If you have agreed to sell your home during a divorce, this is what to do:
Prepare the home and make some improvements
When selling a home in Alberta, you have two options (1) Sell the home as-is. (2) Make improvements to the home. You may make the improvements on your own or with your partner. To cover the costs of the improvement, you may negotiate a higher percentage of the proceedings.
If you cannot agree on which option is best, we recommend selling as is.
How to stop your spouse from selling the home during a divorce in Alberta
During a divorce, even if the property is registered under your name, you should not sell it without informing your partner. Why?
If the court finds that you attempted to commit fraud against your partner, it may grant half of the property to the spouse. To prevent your spouse from selling the home, you may apply for a temporary financial restrain, or your spouse may apply for a statement of claim for division of family property. Or in other words, you may get sued.
What to do if your partner refuses to sell during a divorce in Alberta
- Ask the court to order the sale (consult with your lawyer). You may file a contempt motion if the person disobeys a court order.
- Buyout your partner or exchange equity for valuable matrimonial property.
