Where spouses jointly own a home and one moves out following a separation, the remaining spouse may be asked to pay occupation rent to the spouse who left as they continue to enjoy the property. However, occupation rent will not be available to every party who leaves their residence and will only be granted where courts deem it reasonable. When evaluating a claim, occupation rent is not considered on its own. Instead, judges will consider various factors and the totality of the parties’ circumstances when deciding whether the remedy is warranted.
Occupation Rent Can Help Parties Achieve Financial Equity
When one party occupies a property and excludes another interested party from the property, it may be appropriate for the occupying party to pay occupation rent. This can occur in family law cases where one party continues to solely occupy the family home following the breakdown of the parties’ relationship.
The decision in Griffiths v. Zambosco held that a court has jurisdiction to order a party to pay occupation rent if it is reasonable and equitable to do so. Caselaw emphasizes that occupation rent is a discretionary remedy and whether or not it is appropriate will depend on the specific circumstances.
In Phelps v. Childs the Court noted that a claim for occupation rent must be specifically pleaded by the party making a claim, and it would be an error for a trial judge to order a party to pay occupancy rent in the absence of a request for that relief.
Occupation rent is an equitable remedy. In Higgins v. Higgins, Justice Quinn explained that “the courts are attempting to balance the equities when dealing with a claim for occupation rent. Thus, occupation rent is merely a tool used to achieve justice in the circumstances of each case”. In this sense, it helps ensure financial fairness between the parties.
Determining the Appropriateness of Occupation Rent
The circumstances to be considered in an occupation rent claim will vary depending on each unique set of facts. However, Saroli v. Saroli proposed a list of relevant factors:
a) the timing of the non-resident spouse’s claim for occupation rent.
b) the circumstances under which the non-resident spouse left the home.
c) the duration of the exclusive occupancy.
d) whether the non-occupying spouse moved for the sale of the home.
e) the inability of the non-resident spouse to realize on their equity in the property.
f) any financial hardship experienced by the non-resident spouse as a result of being deprived of their equity in the property.
g) any reasonable credits to be set off against occupation rent for expenses associated with the home.
h) the conduct of both spouses, including any failure to pay support.
i) whether children resided with the occupying spouse and, if so, whether the non-occupying spouse paid child support.
j) whether the occupying spouse has increased or decreased the selling value of the property.
k) any other competing financial claims in the litigation.
In Griffiths, the Court noted that the trial judge is best positioned to determine the weight given to these and other relevant factors. As such, a reviewing Court should not interfere with the trial judge’s discretion in ordering or refusing occupation rent unless the finding is unreasonable or there is an error in principle.
Courts Look at the Parties’ Financial Arrangements
While judges have discretion in determining the appropriateness of occupation rent, some cases have warned that the remedy should be limited to exceptional cases.
In Foffano v. Foffano, the Court reviewed some of the difficulties in applying the law on occupation rent to parties who are married and disputing the matrimonial home. The Court explained that there may be conflict with the more flexible provisions of the Family Law Act, which were designed to protect children and dependent spouses, and warned that the party not in possession of the home could advance a claim solely to counter legitimate claims for spousal or child support or equalization of family property. On this basis, the judge in Ward v. Ward declined to award occupation rent finding that there was significant and unreasonable delay in making the claim. Ultimately, it appeared more opportunistic than principled, and in the judge’s view this was not an exceptional case, so the claim was dismissed without merit.
Whether an order for occupation rent will be deemed appropriate by the courts depends on a range of factors. For this reason, courts have highlighted that the issue cannot be determined in isolation but “must be considered as part of the total financial context of the parties”.
In Al-Fatlawi v. Al-Bajawi the Court considered the financial circumstances between the parties and found that the respondent’s failure to pay child support weighed against an award of occupation rent. The respondent had paid irregular support, failed to pay the children’s section 7 expenses contrary to a prior court order, and was in arrears of child support payments. Further, the respondent’s mortgage arrears also counted against an award. Following separation, the parties jointly made mortgage payments on the matrimonial home, however, the respondent stopped making his payment and left the applicant solely responsible for the mortgage and other carrying costs of the home. The judge also pointed out that the respondent took over $200,000.00 from the parties’ joint line of credit for his own personal use, and when he stopped paying the costs of the loan, the applicant was subsequently forced to pay interest to avoid proceedings that would have caused the matrimonial home to go into foreclosure, causing the applicant financial hardship. The aforementioned conduct by the respondent also counted against awarding occupation rent, therefore, it would have been unjust to allow the claim.
Calculating the Payment Amount
Both parties will be responsible for the expenses of a jointly owned home. Thus, the party in occupation may have a claim for half of the expenses they have paid in maintaining a property, such as mortgage costs, taxes, and repairs. Yet, as Surana v. Surana demonstrates, the occupying party might face a claim for occupation rent, and the non-occupying party can claim occupation rent provided they are prepared to cover their share of the costs.
This was the approach in Ganie v. Ganie, where the respondent sought to recover half of the expenses of maintaining the home. It was fair for him to pay occupation rent as he was living in a house that was jointly owned. Further, he had not paid support for several years and did not have access to his ex-spouse’s share of the equity in the home, which made it difficult to support the children. Overall, it was deemed appropriate for the respondent to pay occupation rent while the applicant lived in rental properties.
Craig v. Craig considered the approach to be used in quantifying an amount of occupation rent, finding that an equitable approach would be to allow a claimant one-half of the rent that the premises could attract, subtracting half of the taxes, insurance, and other property costs. However, while the husband in this particular case had a claim in principle, half of the expenses exceeded one-half of the rent he was entitled to. Consequently, the court noted that where there is a significant mortgage against a property, the quantum of rent may end up being zero.
Considerations Before Making a Claim
Courts maintain discretion in awarding occupation rent and may limit the equitable remedy to exceptional cases. A party seeking financial recourse should promptly make their claim and not delay before giving the other party notice. It is also important to recognize that a party’s conduct may be considered when the court is assessing a claim, especially if one party’s actions have caused the other party financial hardship.
Contact the Family Lawyers at Boulby Weinberg LLP for Skilled Representation in Occupation Rent Claims
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