Alexander, author of the recent book “Zoom Divorce,” said that the tanking real estate market in Ontario is complicating ongoing divorce cases. He explained that a major part of dividing assets in a divorce is determining their cash value, which can be tricky when real estate prices are fluctuating dramatically.
In some cases, a couple will simply sell the home and divide the profits. In other cases, especially involving young children, one parent will want to remain in the family home, agreeing to give up an equivalent value in other assets.
“For most couples, the family home is their biggest asset, so a lot of the divorce centers on who gets it and what the other person gets in return,” said Alexander. “When home prices drop dramatically, as they are in Ontario right now, that can quickly upend negotiations.”
With real estate prices unstable, Alexander said some couples may choose to negotiate a future payment to be made when the home is eventually sold, but that requires a lot of trust between the two sides and can lead to more legal fights down the road.
Adding to the problem is the fact that interest rates are rising, which makes it trickier for couples to get a new mortgage on the home as a solution.
“The value of a home is not just its price but also the memories it holds, and it can be tricky for couples to decide who should get to ‘keep’ it and how much that’s worth,” Alexander added. “The fact that real estate brokers and banks would have trouble deciding on a cash value right now just compounds the problem.”