How to Protect Your Rights in the Family Residence: Registering a Spousal Lien
If your relationship is breaking down, you may be wondering how you can protect your legal rights in respect of the family home or other real estate you and your partner share. Particularly in scenarios where only one partner is the registered legal owner of a property, the spouse who is not listed on title may feel they are at an unfair disadvantage.
This post will explore one method in which a spouse can protect their property rights; registering a spousal lien.
Register a Spousal Lien
One method of protecting an interest in the family home is registering a Land (Spouse Protection) Act charge or “spousal lien.”
What does a spousal lien do?
Registering a spousal lien on the title to the family home gives notice to a prospective buyer or lender that someone is claiming an interest in the property. Once a spousal lien is registered, the registered owner is prohibited from selling or mortgaging the family home without their spouse’s written consent.
A spousal lien also protects a spouse’s right to reside in the family home for their lifetime. If the registered owner spouse dies, the surviving spouse is entitled to a life estate in the family residence. The life estate overrides any dispositions made in the registered owner’s will. For example, if the registered owner gifts the family residence to a friend or relative in their will, the gift will not take effect until the death of the surviving spouse, or when the surviving spouse decides to leave the family home. In other words, the spousal lien protects the surviving spouse’s right to reside in the home for as long as they wish and takes precedence over dispositions made in the registered owner’s will. However, the life estate is subject to the foreclosure of the family home and liability for debts.
A spousal lien can only be registered on the family residence if it is owned by one or both of the spouses. If the property is owned by a third party, or owned jointly by one of the spouses and a third party, the Land (Spouse Protection) Act does not apply. In that case, you may consider registering a Certificate of Pending Litigation, or CPL. Read more about CPLs on our blog, here.
Who can register a spousal lien?
A spousal lien can be placed on the family home by a married or common-law spouse.
When can a spousal lien be registered?
The spousal lien can be registered at any time, but if one spouse has left the family residence, it must be registered within one year of the spouses living together in the residence. A spousal lien does not require litigation to be ongoing.
Typically, the registered owner will not be notified when a spousal lien is registered. However, if the title to the property is requested by any person, for example, in contemplation of a sale or refinancing of the property, the spousal lien will appear on the title.
Does a spousal lien expire?
A spousal lien will expire and no longer have any effect when both of the following events take place:
1. The spouses separate, and
2. The division of the family home has been resolved either by the agreement of the parties or a court order or agreement made under the Family Law Act.
The spouse who registered the lien may remove it at any time.
A registered owner may apply to cancel a spousal lien if the registering spouse is deceased.
Keep in mind that a cohabitation or prenuptial agreement may include provisions limiting a spouse from registering a spousal lien.
How to Register a Spousal Lien
An application for a spousal lien may be made to the registrar of land titles. Refer to the prescribed forms in the Forms Regulation of the Land (Spouse Protection) Act. Complete Form B, Application for Entry, which is a declaration that the applicant is entitled to a spousal lien. Complete and file the affidavit in Form A to support the Form B application.
Important Differences Between a Spousal Charge and a CPL:
A spousal lien can only be registered against the family residence, or “homestead” as the Land (Spouse Protection) Act describes it. A homestead means a property that the spouses occupied as their residence or a property that the spouses occupied within the year immediately preceding date the application for the spousal lien was made. Conversely, a CPL may be registered against any kind of real property, including commercial or vacation property. Read more about CPLs on our blog, here.
A spousal lien can only be registered if the property is held by one or both of the spouses. A CPL may be registered against property held by one or both of the spouses, or by a third party.
A spousal lien may be registered at any time before the registered owner dies if the registered spouse still resides in the home, or moved out within 1 year. Litigation does not need to be in progress to register a spousal lien. Litigation must be in progress before you can register a CPL.
While a registered owner is typically not notified when a spousal lien is registered, all the registered property owners are notified if a CPL is registered.
FAQS
1. Can a spousal lien be registered on any property owned by my spouse?
No. A spousal lien can only be registered against the family residence (homestead)—the property that the spouses lived in together as their home or lived in within the year before the application. It cannot be placed on other properties such as vacation homes, rental properties, or commercial real estate.
2. Does registering a spousal lien give me ownership of the home?
No. A spousal lien does not transfer ownership. Instead, it protects a spouse’s interest in the property and their right to occupy the home, and it prevents the registered owner from selling or mortgaging it without consent.
3. Can a prenuptial or cohabitation agreement prevent a spousal lien?
Yes. Some cohabitation or prenuptial agreements include clauses that limit or prevent a spouse from registering a spousal lien on the property.
4. Does the registered owner get notified when a spousal lien is filed?
Typically, the registered owner is not immediately notified when a spousal lien is registered. However, the lien will appear on the property title and will be visible to anyone who searches the title, such as potential buyers or lenders.
5. When does a spousal lien end?
A spousal lien usually expires once the spouses separate and the division of the family home is resolved through a court order or agreement under family law. The spouse who registered the lien may also remove it at any time.
Book a consultation with our team to learn more about your legal rights in respect of the family home and how to protect them.
