Canadian Lawyer

March 2018

The most widely read magazine for Canadian lawyers

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w w w . C A N A D I A N L a w y e r m a g . c o m M A R C H 2 0 1 8 21 it's all sorted out, which means that the person can't complete the purchase of their home. "And then, of course, all of a sudden they're in a conundrum: 'Well I'm going to get sued by the seller if I don't complete and yet I think it is unequitable what my spouse is suggesting all of a sudden.'" At that point, they may be forced to choose between some unsavoury options: risk being sued or concede to terms that were previously unaccept- able just to nail down that separation agreement in time to get the financing approved for the house purchase. If the terms include taking a smaller cut of the house proceeds, it could mean having to find someone else, like a fam- ily member, to go on title to secure the additional financing required for the purchase. Problems might well be avoided by the lawyer handling the real estate deal. Finding out the individual's marital situation and what bearing that might have on the transaction will make a difference if those questions are asked. Although, that, too, isn't always failsafe, says Regina, Sask. lawyer Yens Peder- sen, because much of the conveyancing work is often done by legal staff. "In a lot of cases, a lawyer will simply glance at a file, not really paying a lot of attention to it," he says. "Sometimes, because of that, there's a danger that the lawyer handling the file might not actu- ally be apprised" of the fact that the file should be handled differently. There is also a risk that the other spouse will later make a claim on the property purchased after the disintegra- tion of the relationship if that agreement is not crystalized, adds Pedersen. Some couples, for instance, simply separate, live apart and continue on with their lives independently. If one buys a house, the other could argue that it's part of the divisible family property. In Saskatchewan, he points out, the default division date is actually the date that legal proceedings are commenced, not the date of separation. So, if they haven't dealt with the separation of property, everything that they've each acquired, even after their split, could well end up on the table as divisible family property. In Johnston v. Johnston Estate, a couple living in a house in Vancouver worth $40,000 in 1971 separated but never divorced and they had no separa- tion agreement. "Because they were still married, there was no limitation period that kicks in," which would normally be two years from the time of separation for those that aren't married or two years from the date of divorce for mar- ried couples, says Lauren Read, who practises family law and real estate law with BTM Lawyers LLP in Port Moody, B.C. Decades later, in 2015, the husband sought half the current value of the house, which by this time had skyrock- eted in value to $1.2 million, and he was successful. Because in B.C. family law value of property is based on the fair market value at date of trial or date of the actual agreement, there is a risk for those who don't resolve the issues in a timely mat- ter that the values will fluctuate. Untitled-2 1 2018-02-07 2:05 PM

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