Valuation Date And The Former Family Home
With the rapidly rising real estate market in British Columbia, one point of concern following separation can be when the former family home should be valued for the purposes of property division. Should post separation market gains be included? What if only one party is paying the mortgage?
Section 87 of the Family Law Act provides that unless an agreement states otherwise, or a judge orders otherwise, family property is valued as of the date of a separation agreement, or the date of the hearing to determine division of property as the case may be.
In the case of a separation agreement, the valuation date can be a point of negotiation. However, if a family law dispute requires court intervention, there can be much less flexibility in dealing with the valuation of the family home.
British Columbia judges have interpreted this section as meaning that in the majority of circumstances, the date of the hearing (i.e. the present date) will be used unless there is good reason to use another date. In order for some date, other than the present date, to be used, the courts have held that a present date valuation must result in “significant unfairness” to one or both parties.
Factors that will be considered in determining whether “significant unfairness” arises in these circumstances include whether one party has had sole use of the property, whether one party has been solely responsible for the upkeep and expenses of a property, whether the party who moved out has been prevented from purchasing a new property, or what expenses the party who has moved out has incurred for accommodations (e.g. rent).
As a result of this interpretation of section 87 and the current real estate market, the amount of time a family law dispute takes to resolve can significantly impact the division of family property. Depending on the circumstances, one party may be more than happy to wait for resolution, while the other party may want to resolve the value of the family home as soon as possible.
If you would like to book an appointment with any of our family law lawyers, namely Kathleen Sugiyama, Christopher Murphy or Nathan Seaward, please contact Heath Law LLP at 250-753-2202.