Nature of Act’s Rights
The Family Home Protection Act 1976 introduced protections for the non-owning spouse. Prior to the legislation, a non-owning spouse was thought at best to have a licence to stay in the family home on the basis of the husband’s general obligation to maintain her.
The property could be mortgaged or sold to a third party without the spouse’s consent unless she had a beneficial or legal interest in the property. A husband could sell a property to a third party owner, who, even though he was aware that the property was a family home, could take the title and evict the spouse. The spouse’s rights would not defeat the sale.
The Family Home Protection Act does not give any ownership rights to the non-owning spouse. Rather, it gives the non-owning spouse the right to veto any transfer or so-called disposition of the property or a share in it to a third party. The spouse’s prior written consent is required.
The Family Home
The family home is the dwelling house in which the married couple ordinarily resides. If a spouse’s protection is in question and he/she has left the other spouse, the family home includes the house in which this spouse ordinarily resided beforehand.
A dwelling house includes a building or a part of the building occupied as a separate dwelling. It includes gardens and lawns usually occupied with the dwelling that are subsidiary or ancillary to it or otherwise required for the amenity and convenience of the dwelling. It includes a structure, whether or not permanently attached to the ground, and a vehicle, whether mobile or not, occupied as a separate dwelling.
A family home may be part of a larger holding, such as a farm or an estate. It is doubtful, although the courts have taken different views, whether a disposition of the entire property comprising a family home and a “non-family home” can be severed so that the non-family home element is valid. The non-family home element can of course be separately transferred or mortgaged.
A purported transfer of the family home without prior written consent is void. The proceedings to have a transfer deemed void must be taken within 6 years.
The disposition of the family home includes the transfer, lease, mortgage or lease of all or any interest in the property.
Where property is divided on judicial separation or divorce, the court shall order, unless there are good reasons otherwise, that the Family Home Protection Act shall no longer apply to the property or properties divided.
The Family Home Protection Act effectively requires purchasers of a property to investigate its matrimonial status. If the purchaser has made all proper and prudent enquiries, and has no reason to know or suspect that the property is a family home, then a transfer to that purchaser is valid notwithstanding the fact that the property may in fact be a family home and consent was not granted.
Generally, a sworn declaration is required as to the marital status of each of the sellers and the status of the property for sale.
The spouse’s prior consent is required for the sale contract. Because sale contracts are not generally retained, consent is usually endorsed on both the sale contract and the transfer.
Where the spouses are joint owners or tenants in common of a property and each sign the contract or deed in their capacity as owners, no separate consent is required. Where a contract is validly entered prior to marriage, consent is not required for its completion.
The mortgage of a property is the transfer, thereby requiring the consent of the non-owning spouse. A further advance of money, which increases the extent to which a family home property is mortgaged, requires the consent of both the owning and non-owning spouse.
This may be significant, for example, where a bank advances money to one spouse on foot of a mortgage originally signed by both spouses as co-owners or where there is a single owner. Unless both spouses consent to each further advance, the incremental mortgage and reduction of equity are invalid.
A significant limitation of the Family Home Protection Act is the fact that one spouse’s debts may be the subject of a judgment mortgage. The judgment creditor may seek and would generally be entitled to an order for the sale of the property which may, in effect, deprive the non-owning spouse of the property.
Informed & Free Consent
The spouse’s consent must be fully and freely given. This issue is prospectively important in the context of a transaction in which the non-owning spouse has no financial interest. This is treated in a similar way to a guarantee and independent legal advice is generally required.
For example, a non-owning spouse may consent to a mortgage of the family home for the other spouse’s debt without appreciating the full significance and risks. The court may find undue influence or invalidity. The financial institution may be bound because it is deemed to have implied knowledge of the spouse’s lack of knowledge.
It is possible for a spouse to give a general consent in advance to future dispositions of the family home. This is commonly done in the case of a separation agreement. A general consent could be given for future advances under a mortgage. However, because of the risks, the consent must be fully informed.
Consent by Court
The spouse’s consent can be dispensed with if he/she unreasonably refuses or omits to give consent. The spouse’s actions must be unreasonable in all circumstances, including needs and resources of the spouse’s dependent children and alternative accommodation.
The consent of a spouse who is of unsound mind, suffers from a mental disability or cannot be located may be dispensed with by the court. If the spouse has deserted and continues to desert, the applicant may apply for an order that the deserting spouse’s consent be dispensed with. See separately in relation to the concept of desertion.
An application may be made to the court on the basis of the other spouse being engaged in conduct which might lead to the loss of the family home or render it unsuitable or unfit for habitation with the intention of depriving the applicant spouse or dependent child of residence in the home. The court may make such orders as it sees fit, including compensation and even a transfer of ownership. The respondent spouse’s actions must be deliberate. Carelessness and irresponsibility would not generally be sufficient.
Where a spouse or child has been deprived of his residence or of an interest in the house, the spouse may apply to court for an order to pay compensation or such orders as the court considers just and equitable.
Where matrimonial proceedings have been commenced, an application may be made for an order restraining the other spouse from removing household goods without the consent of the applicant. Breach of the order is a criminal offence.
Household goods include furniture, clothing, household facts, domestic animals and consumables. It does not include business property.
A spouse may be ordered to replace the items or pay money in lieu. The court may order the creation of a lien or other security.
Landlords & Mortgagees
Where payments such as rent, mortgage payments and other debts owed by one spouse are paid by the other spouse, they are deemed as having been paid by the first spouse. Therefore, a landlord or mortgagee must accept mortgage or rental payments from the other spouse.
Where repossession proceedings are taken by the mortgagee or landlord of the family home, the court is empowered to adjourn proceedings where it is satisfied that the other spouse shall and is in a position to discharge the arrears and make future periodical payments. Before so doing, the court must have regard to the terms of the mortgage or lease.
If such an order is made and the arrears are paid, there is deemed never to have been a breach. Therefore, for example, if all mortgage money falls due and there is a breach of mortgage allowing enforcement, the right may be removed if the non-owning spouse rectifies the position.