Some of the biggest questions that arise during a separation or divorce have to do with the matrimonial home: What’s my home worth? Will I need to sell? What if I want to buy my spouse out? What if they want to buy me out and I refuse? If you’re grappling with similar questions, read on…we’ll answer them. Of course, this post is not to be construed as independent legal advice, as every situation is different, but we hope that this post will help improve your familiarity with some of the important concepts below.
What is a matrimonial home?
In layperson’s terms, a “matrimonial home” is defined by the Ontario Family Law Act as a home that was lived in by the spouses at the time of separation. A matrimonial home can be rented or owned, and there can be more than one matrimonial home – for example, chalets or cottages can often (but may not always) fall into the category of matrimonial homes. Sometimes it is clear that a property is a matrimonial home, and sometimes it isn’t…this can be an issue to be worked through as part of the legal process.
Why is it important to know the value of a matrimonial home?
It can be extremely important to determine the value of a matrimonial home in the context of a marriage breakdown. Clearly, the home is often one of the most valuable assets, if not the most valuable asset, that people own, and both spouses deserve to be compensated fairly for the value of this asset in the context of the overall settlement.
If the home is jointly owned and will be sold as part of the separation process, the value will be pretty straightforward – it’s simply going to be the price the buyer pays, and often, the parties will simply agree to divide the sale proceeds equally after adjusting for the remainder of the property settlement they agree on.
Buyouts and creative matrimonial home settlements
As mentioned, many people sell their homes when they get divorced. But in other circumstances, they don’t, and in these situations, it will be crucial to take all possible steps to “get the value right.” We deal with situations like this all the time. These situations include:
As you can imagine from the examples above, there is no limit to the creative solutions we can arrive at in a well-structured mediation process, where we do our due diligence in order to properly value the matrimonial home, as well as all of the other “net family property,” and the parties’ incomes for support purposes.
Market value of the matrimonial home: Why it’s so important to “get it right”
In all of these “non-sale” cases and more, it is crucial to value the home as fairly and accurately as possible so that both spouses feel that they have been adequately compensated and not taken advantage of by the other. Otherwise, the person doing the buying out will balk out of fear of paying too much, or the person being bought out will hesitate out of fear of receiving a settlement that’s too low. If either of these fears persist, the buyout will not happen and the house will have to be sold – which may be a result neither party truly wants.
But how do you go about “getting it right?”
Having an appraisal done by a qualified third party is a must. Knowing the real and current value of the home is vital for prudent decision-making and conducting fair negotiations. It will also help you to feel empowered to some degree - which is just as important in these situations where many things feel like they are out of your control. Knowledge is power.
What Is an appraisal?
An appraisal is an assessment of what is considered to be the value of the home– also known as the “market value”. Market value, in short, is the highest estimated monetary value a property will bring in if listed for sale on the open market. In other words, it is how much money someone would be willing to pay for your property. The value can be expressed as one number, or as a range.
Sometimes appraisal values are required for both the date of separation as well as “today’s date.” This will depend on many issues in the context of your specific situation.
Who can do an appraisal for you?
In the past, only a certified appraiser’s report was acceptable to lawyers, mediators and judges. Nowadays, qualified real estate agents can also provide appraisals. Particularly in the case of mediation, where it’s essential to the parties that the correct value be arrived at, many separating spouses are choosing to retain a real estate agent, or agents, jointly, to provide the appraisal, since real estate agents are the ones on the ground and are the professionals who are intimately familiar with area properties and current market forces.
The bottom line is that there is no way to know the “correct” value without selling the property – but in the context of a well-run mediation process, clients can take comfort in feeling that the process was a fair and collaborative one, and they can sleep at night believing that the price was reasonable.
What should I ask my appraiser?
Before hiring just any real estate agent to do your appraisal, be sure to verify that they really are qualified to do the job.
Here are a few questions you should ask any potential appraisers:
In challenging circumstances such as separation and divorce, having an experienced, neutral professional on your side can make the appraisal process run smoothly. Making sure the person you hire is truly looking out for your best interests, understands your situation and can be supportive will make this process much easier on you.
Our mediation and real estate services
RDK’s real estate partner, Daniella Gold, is pleased to offer no-obligation, complimentary appraisals to RDK’s mediation clients. Having been through a divorce herself, and by virtue of her extensive work with separating and divorcing clients at Harvey Kalles Real Estate, she understands how emotionally challenging it can be to negotiate over a much-loved home, and she will work tirelessly to educate and support our clients with the utmost of professionalism, compassion, and discretion while they are working through their divorce mediations with us. RDK clients who do ultimately decide to sell their homes receive our exclusive preferred client commission rates when they use Daniella as their listing agent.
Thanks for reading and we hope you’ve gained a clearer understanding of matrimonial homes, as well as the role we can play in ensuring that you are compensated fairly in your divorce settlement. Please contact us any time for more information on how we can help!
Welcome back to the RDK Divorce Group blog! In our last post, we busted several myths about mediation. Today, we’ll conclude by debunking a few more mediation myths.
Myth: If mediation fails and we wind up in Court, my ex will be able to use the things I’ve said in mediation against me.
Reality: In an “open” mediation, this is a legitimate concern, but in a “closed” mediation process, nothing that is said in mediation may be used by either party in subsequent Court proceedings. We have all of our clients sign a contract at the beginning of the mediation process, committing to a closed process and agreeing that nothing said in mediation can be used against them. This contract is binding and the Judge has to respect it.
Myth: Mediation replaces the need for lawyers.
Reality: Most ethical mediators, ourselves included, will encourage (but obviously can’t compel) clients to obtain independent legal advice at the end of the process, prior to signing a final separation agreement incorporating the terms agreed to in the mediation. Some clients also find it helpful to consult a lawyer before beginning the mediation process, in order to get a sense of their legal rights, and/or to have a lawyer in the background to consult with along the way. The level of lawyer involvement depends on a number of factors, including budget, complexity of issues, and degree of client sophistication.
Unfortunately, divorce lawyers have a bad rap for fanning the flames of conflict in order to steal people’s hard-earned money, and people try to avoid them like the plague; in reality, it is the system, and not most lawyers, which creates unnecessary drama. There are many ethical lawyers (especially collaborative family lawyers) who will respect your goals of efficient closure and who will be happy to spend 2-3 hours with you reviewing the draft mediation agreement at the end of the process, discussing it with you, and helping you finalize it in a manner which is respectful of the mediation process. Again, we can’t force people to have lawyers review their mediated agreements, but we do recommend it.
Myth: Mediators are too expensive. My ex and I are on amicable terms. We can negotiate our own separation agreement.
Reality: In rare cases where the issues are very simple, this may be true. But when you introduce the slightest complexity (children, finances), a DIY separation agreement can be extremely dangerous. There is a reason why mediators are paid for their skill and expertise; we at RDK have the necessary multiple professional designations and decades of experience to guide you expertly through this process and avoid all of the potential landmines along the way. We care deeply about our clients, but we are not personally involved in the emotional issues, as our clients are, and we can be objective. It can be extremely dangerous, in complex, emotional circumstances, to go it alone.
Unfortunately, we have had far too many clients come to us to clean up the messes they’ve created with DIY separation agreements. In these situations, we generally have to start all over, on the basis that someone felt taken advantage of, did not understand the agreement, and/or did not have legal advice at the time the agreement was signed. People are shocked when we share with them the basic tenet of contract law that agreements can be set aside or modified in any number of circumstances, including the ones we’ve just mentioned. Being forced to start all over again can have significant financial consequences and can lead to a lot of anger and resentment.
Mediation, done right, is a solid investment in a peaceful future. Our clients’ cases are completed efficiently, and they split our hourly rate in half. Compared to each person paying a lawyer for years on end, this represents a huge cost savings; unfortunately, this is one of the best-kept secrets out there.
We hope that we’ve helped dispel some of the common myths about mediation. If you feel that mediation could be right for you, contact us today and we’ll be happy to discuss your case further.
We’ll be back in a few days with a new post on how our unique interdisciplinary mediation system stands out from other mediation processes, and why we’re confident that RDK Divorce Group is uniquely positioned to give our clients the best possible guidance through one of the most challenging transitions of their lives. We’re excited to share more with you soon!
Unfortunately, mediation is still not as well-understood as it should be, and many people still believe that the only way to resolve their legal issues is to hire the toughest lawyer in town. That’s unfortunate, because spending tens of thousands of dollars in legal fees is not only unaffordable for most people – it’s completely unnecessary in the vast majority of cases. Read on to learn more about the myths and realities of mediation!
Myth: A mediator might force us into making final legal decisions about our children’s futures and our financial settlement.
Reality: Mediators cannot, and never should, force their clients into anything at all. A mediator should function as a neutral, impartial third party with subject-matter expertise and advanced conflict resolution skills. While a skilled mediator will guide the parties toward a fair resolution of their legal issues, the ultimate responsibility for decision-making rests with the clients.
Myth: You help people reconcile, right? I heard that mediation is the same thing as couples counseling.
Reality: No, and no! This is a very common misconception, but this myth is absolutely false! In couples counseling, the goal is to work on the relationship so that the couple can stay together. In mediation, the goal is to bring closure to a separation by finalizing an agreement on issues like parenting, support, and property division.
Myth: Mediation wouldn’t work for us because we already have lawyers and have already been to Court.
Reality: Mediation can work at any stage of the proceedings. While many separating couples do choose mediation as a first step, others choose to work with a mediator because they have grown dissatisfied with (or can no longer afford) the legal/court system, and are looking for an alternative process which they feel may better meet their needs and bring them closure more quickly. Many of our clients have come to us after many years in the “system” and have had great success resolving their issues – their only regret is not coming in sooner!
Myth: Mediation only works for “amicable” ex-couples. Our level of conflict is so high that it would be impossible to resolve our issues in mediation.
Reality: We have helped many high-conflict couples succeed in resolving their legal issues in mediation! A few have even been in the system for years, and have been weeks away from trial. As long as both spouses want the conflict to end, feel fed up with court, feel safe in the mediation process, are prepared to make full financial disclosure, and are open, in theory, to the idea of making an agreement with terms within the realm of what is legally reasonable, mediation can be a very effective process for any separating couple.
Unfortunately, the court system fans the flames of conflict, so in these situations it is necessary to work very hard in mediation to undo some of the negative patterns that have become entrenched, but it can be done to a reasonable degree. In these situations, trust and friendship may not be realistic goals, but it is possible, with hard work, to create a workable, businesslike, tolerable “new reality” for the sake of the kids. Even the highest-conflict exes can usually agree on not wanting to ruin the kids’ childhoods, and on wanting to avoid a trial!
That’s it for now, but we’ll be back soon with our second instalment of Mediation Myths and Realities, to answer questions such as: Can things you say in mediation be used against you in Court? Does choosing mediation mean that you can’t use lawyers? If my situation is amicable, can I simply negotiate my own separation agreement rather than use a mediator?
In the meantime, if you’d like more information about our process, contact us and we’ll be happy to discuss whether mediation could work for you.
For separating or divorcing couples, it’s a sad but true fact of life that post-separation conflict can, if left unchecked, quickly spiral into an out-of-control litigation war. But even in cases of difficult conflict, it doesn’t have to be this way.
What many people fail to realize is that in most cases, litigation wars are driven by external factors that have nothing to do with the legal issues in dispute. It’s the anger, fear, desire for vindication, and yes, sometimes even hatred, that colour people’s emotions and prevent them from considering that there may be a better way. Too many people focus on their former spouse’s perceived bad behaviour or poor character, rather than focusing on what the legal issues are and how to resolve them.
But if your sole focus is on “winning” your court case, rather than trying to understand the dynamic behind the conflict, you’ll end up going in circles and wasting your time and money.
The sobering truth is that there is no legal process that can repair a former spouse’s character or heal the pain a former spouse may have caused by cheating or being a less-than-responsible parent. And court rarely, if ever, provides the emotional satisfaction or vindication that litigants are hoping for – it may provide a fair legal outcome, but that’s about it. And at what cost?
Mediation can be a better way because it focuses on negotiating a fair outcome, rather than on “winning.” A good mediator will help clients separate the person from the problem, and focus on interests rather than positions. By treating each party with respect, giving them gentle reality checks where necessary, and helping them have a constructive, goal-oriented conversation about what constitutes a fair legal outcome, a good mediator will help people resolve their conflict, not compound it.
Often, we’ll hear a client claim that their former spouse enjoys or even loves litigation. However, that’s rarely the case. Very few people want to squander tens of thousands of dollars on lawyers or spend years of their lives embroiled in stressful proceedings that harm the kids. The truth is that most people who are stuck in difficult conflict are stuck because they are trapped in their own narratives and don’t stop to consider that they may have other options besides continuing the fight they’ve become so entrenched in.
By way of example, we recently resolved a case for clients who had been in litigation for two years and who had each spent over $100,000.00 on legal fees. It took a grand total of six hours to reach a final settlement. Their lawyers attended mediation with them and signed off on the final settlement, and at long last these individuals were free to move on with their lives. They were beyond grateful, but also expressed regret that they hadn’t attempted mediation two years earlier. One thing they both agreed on was that they had achieved little of value for all of the money they had spent on the legal process.
At RDK Divorce Group, a big part of our work is to help clients identify the factors and emotions which may be getting them “stuck” (and some are way more stuck than others) so that they can resolve the legal issues, put the past behind them, and throw their energies into resolving their issues so that their family can achieve closure, move on, and start the important process of healing from the pain of separation and divorce .
With over forty years of collective experience, we know what we’re doing. No matter how emotionally and/or financially complex our clients’ situations may be, where there’s a will on the clients’ part, we will find a way to get it done.
If you feel that mediation could be right for you, contact us to learn more about our process and how we can help. We’d love to hear from you.