The Facts Of Occupation Rent
During a divorce or separation, a list of the most significant financial assets will always include the family home. And an issue concerning the home that may arise?
Occupation rent.
What is occupation rent? At common law, joint tenants enjoy equal rights to occupy the property, and neither co-owner has a right to exclude the other. If one co-owner is forced out of the home – say, a separating spouse moves out – the Court can order the co-owner remaining in the home to compensate the other for the loss. The amount of occupation rent is often the rental value of the property divided by the number of co-owners. In Alberta, the common law in this area has been partly codified by section 17 of the Law of Property Act.
Usually, occupation rent is a discretionary remedy granted by the Courts in limited circumstances. Factors used in determining a claim for occupation rent are:
- If the spouse in possession of the matrimonial home lives there with the children and is not claiming child support or a contribution to matrimonial home expenses, such as the mortgage, insurance and taxes, an occupation rent claim by the non-occupying spouse is very likely to fail.
- Regardless of children, if the occupying spouse does not claim reimbursement of expenses, the other spouse is unlikely to succeed with a claim for occupation rent.
- As a general rule, occupation rent may be used as a shield, not a sword. In other words, if the party in possession of the home claims contribution to expenses then the non-occupying party may claim occupation rent by way of response or defense to the claim for expenses. This concept is partly codified in section 17(g) of the Law of Property Act, R.S.A. 2000, L-7.
- Courts are sometimes reluctant to consider occupation rent in relation to family law disputes and prefer to apply principles of spousal support to appropriately compensate the parties.
- A party cannot bank his or her claim for occupation rent for multiple years, and then claim a capitalized amount.
- A party must outline the claim for occupation rent in his or her court documents.
- An occupation rent claim may be denied where the matrimonial home increases in value while the occupying party is in possession. The Court may hold that the non-occupying spouse benefitted from exclusive occupation.
- A claim for occupation rent will likely succeed if the occupying spouse has a tenant. The amount of the occupation rent is usually calculated as a percentage of the rental funds received from a third-party tenant.
- Occupation rent is a discretionary remedy so a claimant must come to Court with ‘clean hands’. If they have refused to follow court procedures or court orders, or if their conduct is otherwise blameworthy, the occupation rent claim is less likely to succeed.
It should also be noted that in the family law context, the traditional analysis of occupation rent may not always apply because of child support or spousal support obligations. In our experience, occupation rent claims in the family context are rare and infrequently successful, and are used to off-set claims for the carrying costs associated with the home: mortgage, utilities and property tax.
Occupation rent is one issue in the matrix of family law associated with matrimonial property and support. If you’re seeking shelter with a financial claim, contact the Legal Navigator at Coach My Case today.
