The decision about whether to keep or sell the family home during divorce can turn into an emotional power struggle and an ongoing source of conflicts and negotiations between a husband, wife and their mediator or attorneys during this highly charged time of making life-altering decisions.
Since divorce causes many disruptions to all the parts of a person’s life, it’s not surprising that most people want to stay in their current home for security, continuity and practical reasons and to keep their children’s lives as stable as possible during this challenging time. Reaching a mutual decision about whether to keep the family house or sell it is a complex decision which includes emotional, financial and tax consequences so it’s wise to consider the overall situation and consult with experts who can provide you with objective advice about what the financial and tax consequences will be. In some situations, there is no choice about whether to sell the home or not. During my own divorce, a family court judge I’d never seen issued a bench order that we list our marital home for sale within 30 days just 3 months into the divorce process due my husband’s job contract coming to an end along with his insistence that he wanted to start a new business rather than look for another similar career position. I suddenly found myself having to find a rental home right away for myself, 3 kids and a big dog that was also within my children’s school district and on their bus routes. This move ended up costing me just as much in monthly rent payments as our much larger marital home payments had cost per month even though the rental home was much smaller. If you are faced with the decision about whether to keep or sell the family home due to divorce, here are 5 Smart Questions to Ask: 1. What are your housing options where you live? Will the cost of the house payments be about the same, more or less than a similar place for rent when you figure in the tax deductions for mortgage loan interest? Are there rentals available where you live that meet your needs and are in the same school district? Can you afford the costs associated with moving and/or storing items if you move into a smaller home? 2. Do you know what your house is worth in your current real estate market? Are you under water when it comes to home equity or can you afford to pay off all of the mortgage loans on your home plus cover the costs of selling it and moving? It’s wise to consult with an experienced realtor to find out what comparable homes are currently selling for near your home and what you can expect to net from a sale. You may also benefit from getting an appraisal done which will also help to determine current market value. 3. Can you really afford the house on your own when the divorce is over? Deliberating over this is often truly painful. No matter how much you may WANT to stay in the home, your financial situation will likely become much tighter following divorce. Do you know if you’ll be able to qualify on your own income to refinance the mortgage into your own name? Rising real estate taxes, utility bills, home repairs, maintenance and landscaping can chip away at your new single person budget, making it harder to save for other things as you start your new life. 4. Could you be better off taking other assets in exchange for your share of the family home? The tax man cometh and the tax man then taketh away when it comes to selling homes, retirement funds, stocks and other assets. If you keep the house now and later sell it on your own, you could end up with a hefty capital gains tax bill depending on how much your home sells for at that later time. To figure out how taxes will figure into a settlement agreement, it could be helpful to meet with a tax accountant or Certified Divorce Financial Analyst to figure out the various short and long-term tax consequences that could result from selling or trading both assets and liabilities during divorce. 5. Consider the many benefits of making a clean break by selling the marital home. There won’t be any worry about whether or not either person can qualify on their own income to refinance it into their own name. You can use your share of the profit from the home sale to prioritize your new financial goals. You won’t find yourself in an upsetting flashback in the kitchen one night, remembering that terrible fight you had right near the sink. There won’t be any reason to worry about your former spouse inviting his new love interest into the home you had previously shared together. On September 1, 2017, the rules changed for all small landlords in Ontario who give notice for the termination of a residential tenancy because they require the unit for their own use, or for the use of an immediate family member, defined as owner’s parent, spouse, child, and spouse’s parent or child.
Landlords continue to be required to give their tenant at least 60 days written notice to the end of the term or rent period using the Landlord and Tenant Board Form N12. Be sure you are using the current form N12 – updated on September 1, 2017, which can be found at http://www.sjto.gov.on.ca/documents/ltb/Notices%20of%20Termination%20&%20Instructions/N12.pdf . The old forms may be used for 30 days and will no longer be valid after September 30, 2017. Landlords are encouraged to use the new forms to avoid any confusion. What does end of term mean?If the rent is paid monthly and due on the first of the month, the end of term is the last day of the month. If the tenancy is a fixed term tenancy, such as a one year lease, the termination date on the N12 must coincide with the last day of the lease. What’s changed?Effective September 1, 2017, amendments to the Residential Tenancies Act, 2006 (RTA) now require the following:
What is bad faith?Bad faith occurs when a landlord gives a tenant a Form N12 notice for own use as a way to end the tenancy because of other issues. This means the landlord or their immediate family members, does not have a genuine intention to move into the unit for the purposes of living there themselves. For example, a tenant may be causing damage in the unit or disturbing other tenants and in order to address the situations, the landlord serves the tenant with a Form N12 because the landlord believes this is the least combative way to ask the tenant to leave. This is a common mistake made by landlords which can lead to serious consequences. If a landlord is found by the Landlord and Tenant Board to have acted in bad faith, the landlord could be ordered to pay the following:
The recent changes are one of the components of the province’s Fair Housing Plan, a sixteen point action plan intended to make housing more accessible. Visit the LTB website for updated forms at: http://www.sjto.gov.on.ca/ltb/forms/#landlord-forms LTB | December 29, 2017 Residential Tenancies Act Changes – January 1, 2018The Residential Tenancies Act (RTA) is changing on January 1. These are the changes:
The LTB has updated these forms to reflect the changes:
For More Information If you have questions about how these changes might affect your Landlord and Tenant Board application, call us toll free at 1-888-332-3234 or 416-645-8080 in the Toronto area LTB | December 29, 2017 Above Guideline Rent Increase Applications – The Law is ChangingOn January 1, 2018, two changes to the Residential Tenancies Act that relate to the landlord’s Application for a Rent Increase above the Guideline will come into effect:
The LTB has updated L5: Application for an Above Guideline Increase to reflect the changes. Begin using this new form immediately. Make sure you are getting the latest version of the form by clearing your browser cache. Old versions of this forms will be accepted until January 30, 2018. Collection of questions asked by Ontario’s small-scale landlords as well as the actual answers provided by Landlord’s Self-Help Centre.
My tenant has signed a Form N11 Agreement to Terminate. If I renovate the rental unit am I required to provide the tenant with the right of first refusal?When a tenant vacates a rental unit based on having signed an Agreement to Terminate, they do not have the right of first refusal. I have accepted a Purchase Offer from a buyer, and have given my tenants a 60 days’ notice. They have the option to stay with the new landlord but they would rather move out. Have I done my due diligence or am I missing anything?When a rental property is sold and there is a lease in place, the landlord cannot give notice to terminate the tenancy. The new owner would have to honour the existing lease. However, if your tenants are willing to move out earlier, ask them to sign a Form N11 which is a mutual agreement between the landlord and the tenant to terminate the tenancy. This form can be obtained from the Landlord and Tenant Board’s website at http://www.sjto.gov.on.ca/ltb/forms/ We rent three rooms and the tenants share the kitchen and bathroom- who is responsible for cleaning the shared areas? No one cleans, can I require a cleaning service be used?The tenants are equally responsible for the ordinary cleanliness of the unit. A mutually-agreed upon cleaning schedule may be helpful to divide the workload between the three of them. You may hire a cleaning service, but it should be specified in the tenancy agreement (especially if the cleaner’s are going to be entering the rental unit at a designated time every month). If a tenant is not fulfilling his or her cleanliness obligations under the Act, you may send a reminder letter letting your tenant know that they must keep the unit clean, a copy of section 33 of the Residential Tenancies Act can also be attached (which indicates the tenant is responsible for ordinary cleanliness of the rental unit). If the tenant still fails to comply then a N5 notice may be served. My tenant wants a wheelchair ramp to be installed at her unit. She is presently in a rehab facility and comes home on the weekends. In addition, I put the house up for sale because it has become a financial burden. Do I have to build the ramp?As you can see from the information you have read in the Human Rights Guide, landlords do have a duty to accommodate tenants with special needs unless to do so would cause undue hardship. The Human Rights Code takes precedence over other legislation. Therefore, even if the City is telling you that you’re not required to build the ramp you will still have to follow the Code requirements. I had a tenant in arrears and I filed with the Landlord and Tenant Board. The tenant has left the unit, belongings are in the shed. Can I keep those or throw them out?If this means you received an order of termination after a hearing at the Landlord and Tenant Board, and the tenant moved out as a result, then pursuant to S. 41 (1) of the Residential Tenancies Act, 2006 you may keep, sell or dispose of any remaining belongings left behind by the tenant – either in the unit or anywhere on the residential complex such as the shed. Landlord’s Self-Help Centre has developed a series of Fact Sheets intended to help landlords navigate a range of issues which commonly occur over the course of residential rental relationship.
The Fact Sheets are presented in an easy to follow Q and A format and focus on issues and situations frequently encountered by the client community. The Residential Tenancies Act came into force January 31, 2007, You can find the online posting of the Residential Tenancies Act and Regulations (and other laws) at Ontario’s e-laws web site. You will find additional information in an audio format at “Sound Advice for Landlords“, a podcast project. RTA Fact Sheets
A Guide to Development and Planning at the City of Toronto The latest resource on navigating the long and complex development and planning process at the City of Toronto! An overview of the process, the role of tenants, City Councillors, provisions protecting rental housing...it's all here! Your kids have moved out and now you’re living in a big house with way more space than you need. You have two choices – remodel your existing home or move. Here are some things to consider about each option.
Choice No. 1: Remodel your existing home to better fit your current needs.
Choice No. 2: Sell your existing home and buy your empty nest dream home.
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