During a separation, couples who own a matrimonial property will need to decide on how they plan to address the use or ownership of the property post-separation. Sometimes, the property is sold outright, and the couple finds alternative accommodation (purchase of another property or a rental, for example). However, in other cases, one of the former spouses may elect to buy out the interest of the other spouse. This is where a real estate attorney, working in conjunction with a family lawyer, would be of great assistance.
The Separation Agreement
A separation agreement, among other things, often discusses what happens to a matrimonial property after the couple has ended their relationship. After the parties’ respective family lawyers discuss the terms of what is to happen to the matrimonial property, the parties may agree to a set amount of time to decide on how the property is to be dealt with. Some agreements will allow each spouse the option to buy out the other’s interest in the home, at an agreed-on value. If there is no buyout, then most agreements will specify that the home is to be sold.
Once the parties have agreed that one will buy out the other’s interest in the home and the terms of the buyout have been dealt with, both parties should retain their own real estate lawyer to affect the transfer. Each real estate lawyer will provide independent legal advice to their respective client (explaining any potential land transfer tax implications, for example—of which they are usually none as there is an exemption for property transfers pursuant to a separation agreement).
Each real estate lawyer acts to ensure their respective client fulfills any obligations regarding the property under the separation agreement. The lawyer for the spouse who will be bought out of the property will want to ensure that their client receives payment from the opposing spouse’s real estate lawyer before they allow the opposing spouse to take ownership of the property in their name alone. The lawyer who acts for the spouse who will be retaining the property will want to ensure that the spouse who is giving up their interest in the property understands the nature of doing so. This will usually require the spouse who is being paid out to sign paperwork that reflects they fully understand the ramifications of transferring their interest in the former matrimonial property to their former spouse.
The advantage of using a law firm with both a real estate and a family law department is that everything can be done in one office as opposed to retaining a family lawyer at one firm and then retaining a real estate lawyer at another, saving clients both time and money.
If you are looking to buy out or are being bought out of a former matrimonial property and require assistance, Mills & Mills LLP can help. You can contact real estate lawyer Tejpaul Grewal at 416-682-7055 or by email at email@example.com, or family lawyer Patricia Gordon at 416-682-7146 or by email at firstname.lastname@example.org.