The First 30 Days After Separation: Protecting Your Mortgage
Separation is a crisis moment requiring swift, thoughtful actions to protect your mortgage and rights in Quebec. Decisions made in the first weeks have lasting consequences on your financial and patrimony situation. Here are the immédiate priorities and pitfalls to avoid.
Priority actions in the first 30 days
- Do not leave the residence without legal advice: In Quebec, leaving the family residence can have significant legal consequences. Both married or civilly united spouses have the right to occupy the family residence during proceedings. Consult a family law specialist or family mediator before any decision to leave. The Barreau du Quebec offers a free referral service.
- Document everything meticulously: Keep proof of all mortgage payments, property taxes, insurance premiums, and renovations made during and after separation. These documents will be essential when sharing patrimony or negotiating the buyout amount. Photograph the property's condition and keep all receipts.
- Contact your mortgage lender: Inform your financial institution of the situation without necessarily requesting an immédiate change. Ask for the exact balance, conditions for transferring or removing a co-borrower, and available options. Also request a detailed statement of payments made by each borrower, if applicable.
- Consult an AMF-certified mortgage broker: A broker evaluates your individual requalification capacity under OSFI standards, meaning with your income alone. They explore financing options, calculate the maximum amount you can borrow alone, and identify lenders most likely to approve your file.
- Explore family mediation: In Quebec, 5 hours of free family mediation are offered to couples with common children, whether married, civilly united, or common-law. Mediation facilitates agreements on property sharing, including the residence and mortgage, in a less confrontational and less expensive manner than litigation.
Family patrimony in Quebec: essential rules
The Family Patrimony Act, under articles 414 to 426 of the Civil Code of Quebec, applies automatically to married or civilly united couples. It provides for equal sharing of the net value of the family residence, regardless of the title of ownership, regardless of who made the down payment, and regardless of who made the mortgage payments. Net value is calculated as the property's market value minus the mortgage balance and related debts. For common-law partners, this law does not apply. Each person retains their property according to the registered title, unless a notarized cohabitation agreement provides for different arrangements.
Options for resolving the mortgage situation
- Buying out the spouse's share: one spouse buys the other's share. This requires individual mortgage requalification under OSFI standards, a professional property appraisal, and a notarial deed of transfer. The notary cancels the existing mortgage and creates a new one.
- Selling the property: if neither spouse can requalify alone, selling allows sharing the net proceeds. Costs include real estate broker commission (typically 4 to 5%), the mortgage break penalty if applicable, and notary fees.
- Maintaining a temporary arrangement: both spouses keep co-ownership and the joint mortgage while awaiting a more favourable time to sell or buy out. This option requires a clear agreement documented by a lawyer or mediator on payment sharing and responsibilities.
- Finding a co-borrower: if you cannot requalify alone, a family member or new spouse can become a co-borrower to maintain qualification, per the lender's criteria.
A notary must intervene for any property transfer between ex-spouses, including cancellation of the existing mortgage and creation of a new mortgage in the acquiring spouse's name. Transfer duties (welcome tax) do not apply to transfers between spouses or ex-spouses in the context of family patrimony sharing. An AMF-certified broker coordinates the process with the notary, lender, and appraiser to ensure a smooth transition.