Occupation Rent After Separation: What Happens When One Spouse Stays in the Home?

When a couple separates, one spouse often stays in the family’s home while the other moves out. Sometimes that’s meant to last a few weeks until the house is listed. Sometimes it stretches on for years, especially when the kids are young and neither parent wants to uproot them mid school year.

If you’re the one who moved out of a jointly owned home, you may be asking whether your Ex should be paying you something for living in a house that’s half yours. If you’re the one who stayed, you may be wondering whether the mortgage, property taxes and repairs you’ve been covering count for anything.

Ontario courts deal with both questions through a remedy called occupation rent, and through a wider accounting of who paid what between the date of separation and the date the house is sold.

What is occupation rent?

Occupation rent is compensation paid by a co-owner who has had sole use of a property to the co-owner who hasn’t. In Family Law, it usually comes up when one spouse has lived in the jointly owned matrimonial home after separation, while the other spouse’s equity has sat there untouched: not sold, not borrowed against, not lived in.

The law in this area has shifted considerably over the past few decades. Courts once required “ouster”, meaning proof that the spouse living in the home had actually shut the other one out. That requirement is gone. Ontario decisions including Foffano v. Foffano (1996) and Higgins v. Higgins (2001) dropped it, and courts in Nova Scotia and Saskatchewan have done the same.

Occupation rent also used to work mainly as a defence. If the spouse in the home asked the court to make the other spouse pay half the mortgage and carrying costs, the spouse who had moved out could answer with a claim for occupation rent to even things out. Today, a spouse can bring it as a claim in its own right.

How courts decide whether to award it

The leading Ontario authority is the Court of Appeal’s 2001 decision in Griffiths v. Zambosco. The Court of Appeal restated its factors in Chhom v. Green, 2023 ONCA 692. A court will consider:

• the timing of the claim
• how long the occupying spouse has had the home to themselves
• whether the spouse who left has been unable to get at their equity in the property
• any reasonable credits to be set off against the rent (more on those below)
• any other competing claims in the case, such as support

Chhom also settled a point that had been argued for years. Family courts across Canada had long treated occupation rent as an “exceptional” remedy, to be ordered cautiously. In British Columbia, courts have often used it only to even things up a little between the parties (see Shen v. Tong, 2013 BCCA). In Chhom, the spouse ordered to pay argued that the trial judge had failed to apply that “exceptional” standard. The Court of Appeal disagreed: In Ontario, an award of occupation rent has to be reasonable, but it does not have to be exceptional. The Newfoundland and Labrador Court of Appeal went further in Gosse v. Sorensen-Gosse (2011), holding that it’s the spouse resisting the claim who has to show exceptional circumstances for not ordering it.

The facts in Chhom are worth a look. The couple had cohabited for 19 years and owned the home jointly. The wife had sole possession of it from their July 2017 separation through to trial, and she was ordered to pay her former husband $31,500 in occupation rent. That was in the same case where the husband was ordered to pay her spousal support and an equalization payment of about $240,000.

In other words, a spouse can be ordered to pay occupation rent while also receiving support. The court weighs the claims against each other; one doesn’t simply cancel the other out.

Credits for the mortgage, taxes and upkeep

A spouse who stays in the home is rarely living there for free. They’re often paying the mortgage, property taxes, insurance and repairs. Half of that benefits the spouse who left, whose equity is being protected and, as the mortgage is paid down, growing.

Courts account for this. In McColl v. McColl (1995), the court said any calculation of occupation rent has to take into account what the occupying spouse has paid toward maintenance, taxes and the mortgage, and that the real question is whether occupation rent makes sense in all the circumstances of the case.

Stetco v. Stetco, 2014 ONCA 370, shows how the arithmetic can play out. The husband had stayed in the home and paid the mortgage and upkeep. The trial judge set off the wife’s entitlement to occupation rent against her half-share of those costs. On appeal, the husband argued this was lopsided: she had been credited with the full market rent but charged only half the carrying costs. The Court of Appeal wouldn’t interfere, in part because the husband had led no evidence of what market rent for the home actually was. There was some evidence supporting $1,000 a month, and that was enough.

The lesson from Stetco is practical. If the amount of occupation rent is in dispute, each side needs its own evidence of what comparable homes rent for. Criticizing the other side’s number, without offering one, doesn’t get very far.

Occupation rent and support are decided together

Occupation rent is rarely decided on its own. It sits alongside child support, spousal support, and the division of property, and courts look at how each piece affects the others.

The Alberta Court of Appeal put it plainly in M. (N.) v. M. (C.L.), 2008 ABCA 108: Whether occupation rent is appropriate can’t be decided in isolation, because it has an impact on any spousal support claim, on who is responsible for the ongoing costs of the house, and on how the mortgage is handled.

McKinlay v. McKinlay (1996) is an older Ontario decision, but it shows the same idea at work. The spouse living in the home was not there under a court order for exclusive possession, and the court held that the occupation rent claim should wait until trial or the sale of the house. When that time came, the court said, the trial judge could set off child support owed to the occupying spouse against any occupation rent that spouse owed. Because the spouse who had moved out was unable to pay interim support, the court found it would be unfair to order occupation rent in the meantime.

This matters because of a pattern that shows up often: One spouse stays in the house with the children, the other doesn’t pay support, and nobody pays occupation rent. Years later, each has a claim against the other. A court will look at the whole picture, and it may treat unpaid occupation rent and unpaid support as offsetting each other rather than ordering each one separately.

When the sale is put off

Many separated parents agree, formally or not, to hold off selling the home so the children can finish the school year or stay in their neighbourhood. That can be the right call for the family. But the longer the delay, the more there is to sort out later about who carried the house in the meantime.

There is no fixed formula. Courts look at each spouse’s role in the delay and what each contributed to the home, then adjust where fairness calls for it.

In Nicholson v. Nicholson, 2012 ONSC 4569, the husband stayed in the home for the two years between separation and sale, paying down about $17,700 of mortgage principal. He asked the wife to reimburse half. She argued that he was the one responsible for the delay in selling. The court wasn’t satisfied that the fault lay with only one of them, and found it would not be fair to make the husband carry the mortgage alone. He received about $8,850, even though he’d had exclusive use of the home; the court weighed that against the free housing the wife had received from her parents.

Landrigan v. Bloomer, 2007 BCSC 254, went a different way. The court allowed the mother to postpone the sale until the end of the school year, given the children’s need for stability, her health problems and the parenting she was handling on her own. It also reapportioned the home’s equity 65/35 in her favour, and directed her to cover the mortgage, property taxes and insurance until the sale.

In Korkola v. Korkola (Ont. S.C.J., 2009), it was the husband who resisted selling. He moved out after five months, the wife stayed, and the home wasn’t sold until a 2007 court order required it. He later claimed 18 months of occupation rent. The court refused. His own resistance to the sale was part of the reason his equity had been tied up, and any rent he’d given up was more than offset by his share of the mortgage, which the wife had paid either directly or through deductions from her spousal support.

Read together, these cases suggest that a spouse who drags out a sale may find the delay counted against them when the accounting is done.

If one of you is still living in the house

If you moved out, a claim for occupation rent is no longer a long shot in Ontario. It has to be reasonable and backed by evidence, but it doesn’t have to be exceptional. Timing is one of the factors, so raising the claim early helps, and so does evidence of local market rents.

If you stayed, keep records of every mortgage payment, tax bill, insurance premium and repair. Those payments can reduce or wipe out an occupation rent claim. Support you were owed but never received can matter as well.

Either way, an informal arrangement that seemed sensible at separation can turn into a tangle of competing claims years later. Putting it in writing early (who lives in the home, who pays which costs, when it will be sold, and whether anyone owes occupation rent in the meantime) heads off most of that fight.

Talk to Fine & Associates

If you’ve separated and one of you is still living in the house, or the house is finally being sold and you’re trying to sort out who owes what, the Family Lawyers at Fine & Associates can help you work out where you stand on occupation rent, carrying costs and support. Call us at (416) 650-1300 or request a free phone consultation.