Spousal Consent: Implied or Informed?

Now, we all know that the legal spouse must provide a consent under the Family Law Act in respect to the sale or mortgage of a matrimonial home.

The real question is whether the consent is to be simply implied or whether it is to be a real, truly informed consent.

The Ontario Real Estate Association (OREA) has prepared some standard forms. There are two documents that you should consider, the listing agreement and the Agreement of Purchase and Sale. In fact, we will also look at an Amendment to an Agreement.

1) Listing Agreement

SPOUSAL CONSENT: The undersigned spouse of the Seller hereby consents to the listing of the Property herein pursuant to the provisions of the Family Law Act, R.S.O. 1990 and hereby agrees that he/she will execute all necessary or incidental documents to further any transaction provided for herein.

2) Agreement of Purchase and Sale

Spousal Consent: The Undersigned Spouse of the Seller hereby consents to the disposition evidenced herein pursuant to the provisions of the Family Law Act R.S.O. 1990, and hereby agrees with the Buyer that he/she will execute all necessary or incidental documents to give full force and effect to the sale evidenced herein.

3) Amendment to Agreement of Purchase and Sale

The Undersigned Spouse of the Seller hereby consents to the Amendments hereinbefore set out.

COMMENT

You will notice that the wording in terms of consent is very similar in all three documents. However, if you are observant you will notice one significant difference.

The intention of the document is to have the non-titled spouse agree to sign away their possessory rights under the Family Law Act. These arise only in the case of a matrimonial home.

In the listing agreement, the spouse consents to the listing. In the agreement of purchase and sale, the spouse consents to the disposition. The document clearly does not say, accepts, approves or agrees to the agreement. This is intended to be a simple waiver of the right to remain in the matrimonial home. So, the spouse signs at the end of the document, but not any other part of the document. In fact, they don’t even have to see the rest of the document. The owner spouse will initial every page.

The difference occurs with the Amendment. Here the non-titled spouse who knew nothing of the deal, except to state that he or she would move, now has to consent to the amendments.

This presents a problem, particularly because they never had to consent to the original deal. They didn’t even know what it was, unless they happened to look over someone’s shoulder.

So, this begs the question: is this an informed consent? Does the sales representative have to explain the document? Do they have to explain the transaction? After all, it says “consent to the amendments”. So would it not be a reasonable question to ask; “what are the amendments that I am consenting to…?”

Seems reasonable enough!

But, that causes one more little problem: this must be an informed consent. The sales representative would be obligated to explain it. And, if they are obligated to explain this document, then, why not the Agreement of Purchase and Sale in the first place?

In my view, a sales representative is obligated to explain all the documents to the non-titled spouse.

However, in Ontario, at this moment the prevailing view of the Ontario Real Estate Association is that such consent may be implied from the simple execution of the Spousal Consent. The signature is all that is necessary. No need for an informed consent, just keep the spouse in the dark. Let’s just hope that an amendment is never required. That’s going to be a tough one to explain to a Judge.

Brian Madigan LL.B., Broker

www.OntarioRealEstateSource.com