Matrimonial Home Designation: Don’t Give it Up!

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There certainly are situations where the matrimonial home designation should not be given up.

The registration of the designation on title is like a lien on the property.

That’s fine and it prevents others from coming forward and buying the property or receiving a mortgage on the property because they have formal notice of the spousal interest.

Let’s assume that, the couple settles everything up:

  1. Husband keeps the house in his name alone,
  2. Wife gets some money,
  3. Wife gets a second mortgage on the property to secure future support payments to her.

Now, we have a little issue here. Should she release the property from the designation or should she keep it in place?

Let’s assume that the husband wants to buy a Bugatti or Lambourgini, a Yacht and a Tugboat.

With the designation gone, he can register a third mortgage on title.

With the designation in place, he will not be able to refinance using a third mortgage. So, he will have to come to terms with his ex-wife, settle his debt with her first and then, he can go ahead with his purchases.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com

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