Who Pays the Mortgage, Taxes and Strata Fees After Separation?

Separation does not pause the mortgage, the property tax bill or the strata fees. Often one spouse keeps paying, sometimes while living in the home and sometimes after moving out, and the question of who should bear those costs comes up later when the property is divided.

This article explains how BC's Family Law Act frames those payments, how credits and occupation rent are raised, and the practical steps that keep the issue open for negotiation instead of lost.

The bills do not wait for the property division

Your separation does not change your contracts with third parties. If you both signed the mortgage, the lender can look to either of you for the full payment. The Family Law Act says plainly that its property rules do not affect the rights of a spouse's creditors in relation to family debt (s 82). Strata fees are owed by the owners of the strata lot (Strata Property Act, s 99(1)), and property tax is billed to the property owners.

A missed payment can mean arrears, default interest and collection steps that affect both of you, and in the end reduce the equity you are both trying to divide. So the practical question is rarely whether the bills get paid. It is how payments made by one spouse after separation are accounted for when the home is sold, transferred or divided.

For the wider picture of keeping, selling or buying out the home, see our guide to the family home after separation. This article deals only with the running costs.

How the Family Law Act frames it

• Equal shares. On separation each spouse has a right to an undivided half interest in family property and is equally responsible for family debt, regardless of who used or paid for it, unless an agreement or order provides otherwise (s 81).
• Debt after separation. Family debt includes financial obligations incurred after separation if they were incurred to maintain family property (s 86(b)). A line of credit drawn to pay the property tax may therefore be shared.
• Valuation date. Family property and family debt are valued at the date of the agreement dividing them or the date of the court hearing, not the date of separation (s 87).

That last rule is why post-separation payments matter. If one spouse pays down the mortgage principal for a year or two, the equity grows, and on an equal split the other spouse shares in that growth. Without an adjustment, the paying spouse has funded part of the other's share.

Credits for payments made after separation

The spouse who carried the costs will often ask for a credit: an adjustment, usually out of the sale proceeds or in the property division, for the other spouse's share of what was paid. It is not automatic. It is settled by agreement or, failing that, by the court. Spouses can agree to divide property and debt unequally or to value items differently (s 92). In court, a judge may order an unequal division where an equal split would be significantly unfair, and can consider, among other things, whether a spouse caused a significant increase or decrease in the value of family property or family debt after separation, beyond market trends (s 95).

It helps to separate the kinds of payment, because they are often argued differently:

• Mortgage principal, which builds equity in the home;
• Mortgage interest, property tax, insurance and strata fees, which are the cost of keeping the property;
• Repairs and improvements, which may preserve or add value.

Occupation rent: the other side of the ledger

A credit claim often meets a reply. The spouse who moved out may say the spouse who stayed has had the sole use of a home they both own, and should account for that. This is called occupation rent. It is not a fixed entitlement. It is a discretionary claim that is usually weighed together with who paid the carrying costs, whether children live in the home, and any child or spousal support being paid.

Where one spouse has an exclusive occupation order, the order does not give that spouse an ownership interest in the home (s 90(3)). Our article on exclusive occupancy of the family home explains when those orders are made.

Practical steps while the home is unresolved

• Keep the property in good standing. Talk to your lender before a payment is missed, not after.
• Keep records. Save bank statements, mortgage statements, tax notices, strata fee receipts and invoices for repairs. Note the split between principal and interest.
• Put an interim arrangement in writing. Record who pays what for now, and that each of you keeps the right to claim credits or occupation rent later. A short letter between lawyers is often enough.
• Do not borrow against the home without agreement. New debt secured on the home invites a dispute, and the court can make orders restraining a spouse from disposing of property at issue (s 91).
• Check insurance. Make sure the home insurance stays in force and the insurer knows who is living there.
• Look at support at the same time. Who pays the housing costs can affect support discussions, and the reverse.

Raising these points early does not mean litigating them. Most are settled in a separation agreement, often with an agreed adjustment from the sale proceeds or in a buyout.

Paying for the home on your own? Protect your claim now

Our family lawyers can document your post-separation payments, put an interim cost-sharing arrangement in writing, and deal with credits and occupation rent in the property division, including when the home is sold or transferred.

Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.