Rental Allowance in the Event of Divorce and Separation

The law stipulates that an undivided co-owner who is unable to enjoy his property because of another co-owner’s exclusive use and enjoyment of the property is entitled to claim an indemnity from the one with exclusive use of the property for a given period. 

Often, in cases of divorce and in cases of separation between de facto spouses, one party leaves the family residence, of which he or she is an undivided co-owner. It is also possible that the parties co-own moveable property, like an automobile, and one leaves the automobile that they had used together to the other party. One of the parties will therefore probably find himself with the exclusive use of property that belongs to both parties in indivision.

Following a separation, the first instinct is to go to court on an interim application for a decision on urgent measures and, among other things, to demand the exclusive use of the residence and movables. The parties will then have a court judgment imposed on them, or they will reach an agreement that will be confirmed by the court, which will then have the value of a judgment.

The party who left the property would be entitled to an indemnity for compensation and for the injury suffered from the loss of enjoyment of the property. In other words, a rental amount will be assessed based on the cost of the rent for an identical property, the cost of interest of the loan on the property, if any, and the expenses related to the property.

The quantum, meaning the amount that the court will establish as an indemnity, will ultimately be at its discretion; the established evaluation criteria will guide the court in the matter.

However, for the recourse to be successful, certain conditions must be met and certain precautions must be taken.

First of all, if an agreement or a judgment does not specifically indicate a reservation of the right to a future rental allowance, the recourse under section 1016(2) of the Civil Code of Quebec will not be allowed at the trial on the merits. The reservation of this right will not be automatic and it must be mentioned in order to be protected. If no judgment is rendered before the final trial and there was de facto use of the property following an informal agreement between the parties, the jurisprudence tends to consider that there was no renunciation to the right to a rental allowance and the court may allow the application.

Additionally, the obligations under section 1019 of the Civil Code of Quebec must also be respected, meaning that the two parties continue to cover the common expenses and costs up to their share in the property.

A person who leaves the residence held in co-ownership and does not pay his part of the expenses following his departure will not then be able to invoke his right to the rental allowance to obtain a monthly sum for the loss of enjoyment of the property.

On the other hand, the jurisprudence on the matter indicates that the strict meaning of the term “exclusive use” will be applied, and if a party has use of the residence and custody of the children, the use is not exclusive. In such cases, the application for a rental allowance could be rejected or the amount of allowance reduced accordingly, the reason being that the rental allowance must not be used as a form of reimbursement of child support for a child using the residence, the cost of lodging being already included in the calculation of the support payable.

Rental allowance can be demanded in the context of a divorce or in the context of a separation between de facto spouses, provided that the parties co-own the property.

Following the current jurisprudence, in order for your recourse to have a good chance of success, the conditions established by the courts will have to respected, while remembering that each case is unique and that other rules in family matters may come into play.