Separating spouses may have to deal with the issue of “occupation rent”. If the separating spouses own a house jointly and one spouse moves out, the spouse who remains in occupation of the house may be asked to pay occupation rent to the person who left. This is governed by section 24(1)(c) of the Family Law Act or infrequently through section 122(2) of the Courts of Justice Act.
A claim for occupation rent is usually not a major issue in the case and it is often raised by the non-occupying spouse as a defence to a claim by the occupying spouse for contribution to the expenses of the house. For example, if the occupying spouse asks the non-occupying spouse to pay a portion of the mortgage, property taxes and other expenses related to the house, the non-occupying spouse may resist and raise a counter-claim for occupation rent.
Before making the occupying spouse pay occupation rent, several factors need to be considered including: delay in making the claim for occupation rent; the duration of the occupancy; the inability of the non-occupying spouse to have access her/his equity in the property; the conduct of the non-occupying spouse including the failure to pay child or spousal support; whether the non-occupying spouse has asked for the sale of the house and if not, why; whether the occupying spouse paid the mortgage and other carrying charges of the home; whether children resided with the occupying spouse; and whether the occupying spouse has increased the selling value of the property.
The amount of occupation rent is subject to very significant discretion from judges. Often occupation rent awards are based on half of the fair market rental value of the house. But sometimes awards are made without any specific evidence of rental value.
In my Collaborative family law practice, this issue is generally resolved consensually using interest-based negotiation principles. For more information on this complicated legal issue, please contact my office.