What Is Occupational Rent in Family Law in BC?

Nov 12

Occupational rent is a concept used in family law when one spouse remains in the family home after separation, effectively excluding the other from using it. It’s essentially compensation paid by the occupying spouse to the non-occupying spouse for having exclusive use of the shared property.

In British Columbia, courts may order occupational rent as part of a broader division of family property. However, this isn’t an automatic entitlement. Instead, it’s an equitable remedy, meaning the courts use it to achieve a fair and just result based on the specific circumstances of the case.

When is Occupational Rent Payable?

Generally, a claim for occupational rent may arise when one party has exclusive occupancy of a shared property, like the family home, and the other is prevented from using it. But the situation must meet certain criteria for the court to consider such a claim.

In Stasiewski v. Stasiewski, 2007 BCCA 205, the court set out a quick summary:

If you voluntarily leave the home after separation, and you had the right to return, your claim for occupational rent may be weakened or even denied.
If you were effectively “ousted”—for example, required to vacate—that could strengthen your claim.
However, if the occupying spouse is also claiming expenses related to the home (like mortgage, insurance, or utilities), the court may offset any occupational rent award against those costs.

Does One Spouse Need to Be Ousted in Order for the Courts to Order Occupational Rent?

In the case of J.D.G v J.J.V, 2016 BCSC 2389, the court said that a co-tenant is entitled to claim occupational rent when he or she ha been ousted from property. Absent an ouster from the property there is no claim.

However, if the occupying spouse seeks to recover property expenses from the non-occupying spouse, the court retains discretion to set off occupational rent against the expenses being claimed. The court has the discretion to offset those expenses with occupational rent. There is no absolute right to such a claim or set off, occupational rent is an equitable remedy.

This means that if you stay in the home and you seek reimbursement or division of expenses like property taxes, insurance premiums, utility payments, then you may also be asked to pay compensation for monthly expenses of the non-occupying spouse for their expenses incurred as a result of not being able to reside in the former family home

However, in some cases like L.M.R v. J.F.R., 187 A.C.W.S (3d) 775, seems to suggest that ousting is not required, and occupational rent remains a discretionary tool to achieve fairness.

What Factors Do the Courts Consider When Assessing Occupational Rent?

In the case of Shen v. Tong, 2013 BCCA 519, the wife had asked the husband to move out of the family home and made unsubstantiated allegations of misconduct by the husband towards the child of the marriage.

The trial judge ordered the wife to pay compensation to the husband for the amount of rent he had paid for alternative accommodation.

However, this order was set aside at the Court of Appeal, as the trial judge erred by accounting for the claim on a stand-alone basis, even though she recognized the facts did not amount to ouster, the Court of Appeal said that the trial judge’s credit of the rental costs failed to recognized that doing so further reduced the wife’s family assets to something in the order of 6%, as well as the obvious discomfort for both parties in continuing to share a two bedroom apartment long after they had separated.

The court set out a list of factors to consider when assessing a claim for occupational rent, including:

(i) whether there has been ouster (although several authorities have indicated that this is not a requirement);

(ii) whether children are residing with the occupying spouse;

(iii) whether the occupying spouse has made a claim for contribution from the non-occupying spouse for the expenses related to the premises;

(iv) whether child and/or spousal support was being paid by the non-occupying spouse;

(v) whether the occupying spouse increased the selling value of the property;

(vi) the duration of the occupancy; and

(vii) any other competing claims

The objective of an award for occupation rent is to do what is “just and equitable” between the parties. A claim for occupational rent is generally considered in the context of a claim for unequal division under s.95 of the Family Law Act. Occupational rent can be ordered by making an adjustment in the division of assets or award for compensation if there is a finding of entitlement to occupational rent.

How Have the Courts Treated Claims for Occupational Rent?

Holland v. Holland, 2017 BCCA 75

In Holland v. Holland, 2017 BCCA 75, at the BC Supreme Court, the wife was awarded $20,000 in occupational rent. She claimed $58,000 which was about half of what she had paid in rent. She did not have the use or benefit of her share of the house for over 10 years. However, because the husband had paid insurance, taxes, utilities, and upkeep on the property, and had made some mortgage payments the trial judge awarded $20,000 as a more reasonable figure. This amount was to be paid when the property was sold.

At the Court of Appeal stage, this order was set aside because the wife had not formally made a claim for occupational rent in her pleadings, and for that reason, the order was set aside. Had she plead this in her pleadings initially and given enough notice to husband of this claim, the decision may have been a different result.

Carmichael v. Carmichael, 2005 NSSC 318

In this case the parties were married in Nova Scotia, with no children of the marriage. After separation the husband became involved in another relationship. He and his current partner at the time of trial had twins born prematurely requiring significant medical treatment. The twins were 13 months old at he time of trial. The husband occupied the mortgage free matrimonial home since separation. He hoped to retain the matrimonial home and buy out the ex-wife.

After separation the ex-wife lived with her mother for about 10 months. She collected employment insurance during this time. She suffered from depression caused by the death of her father and from the divorce which impacted her ability to find employment. She underwent major surgery and at the time of trial was on social assistance.

The ex-wife sought occupational rent which was awarded for the following reasons

1) no children of the marriage so each party had a presumptive equal need for the equity in the home

2) there was no mortgage, the husband received full credit for all interest payments and debt payments which he made post separation

3) the ex-wife had to pay for rent for accommodation which were inferior to those accommodation occupied by the husband, the ex-wife had to live with her mother because of economics and lost independence

4) the husband had use of a mortgage free home for an extensive period of time which was a substantial benefit to him

5) improvements made by the husband in the matrimonial home were minimal from a financial perspective, and no receipts were submitted

The amount of occupational rent was tempered for three reasons:

1) There was substantial delay by the ex-wife in seeking redress, itt was the husband who eventually commenced the divorce and there was a delay on the part of the ex-wife in filing a response;

2) The husband did attempt to contact the ex-wife to discuss resolution of the issue but the ex-wife did not respond, the husband could not sell the home on his own; and

3) The husband did pay for taxes, insurance and other maintenance costs.

In this case occupational rent of $200 per month was ordered for 36 months but not the 71 months since separation which formed part of an equalization payment.

Is Occupational Rent Treated the Same in All Cases?

No. Occupational rent is a discretionary remedy. That means it depends heavily on the unique facts of each case. Courts will take a balanced approach and weigh contributions, financial needs, conduct, and whether the claim is timely and properly raised. A successful claim requires a clear demonstration of inequity caused by one party's exclusive use of the property.