Mcgregor

The Property (Rights of Spouses) Act attempts to protect not only the interests of spouses in property, but also the rights of third parties. Such third parties often include ordinary creditors and mortgage companies.

Protecting interest in property

In the typical example, there may be a mortgage registered on the title for the property, which is owned by one or both spouses. In the event that an issue arises between the spouses in respect of the title or possession of that property, the following matters should be noted:

The spouse whose name is not on the title may lodge a caveat to prevent the registered owner from disposing of the property without having regard to any interest that spouse might have; and/or may commence proceedings in court to obtain a declaration that he or she has an interest in the property and seeks orders regarding the transfer of one spouse's interest to the other or the sale of the property to a third party.

The mortgage company may make an application to the court to obtain orders to protect their interest in the property, if an issue arises between spouses. Such orders could result in the sale of the property.

In some cases, the spouse whose name is not on the title may not be able to prevent the disposal of property in which he or she is claiming an interest. However, the act may still provide a remedy as applications may be made in respect of property rights, even after the property is no longer under the control of the spouse who is the registered owner. Such applications could seek to recover money representing the value of the spouse's interest in the property which has been disposed of, if there is proof that no payment or inadequate payment has been made to the applicant.

The act assures mortgage companies that any adjustments of property ownership between spouses will be made subject to their interests. In other words, if the property is to be sold and the proceeds shared between the spouses, the mortgage debt will be deducted before either spouse receives payment.

Transactions to defeat creditors are void

Creditors and other persons who may have an interest in property owned by one spouse may also be comforted by the fact that if one spouse attempts to transfer interest in property to the other in an attempt to defeat the interests of a creditor, the transaction is likely to be struck down as being void. There is also provision for the court to set aside the transfer of assets if the transaction was intended to defeat the rights or interests of any third party.

Much remains to be explored in respect of the act, as there are likely to be novel transactions in respect of family property which do not fall squarely within the examples which the act contemplates.

Sherry-Ann McGregor is a partner and mediator with the firm Nunes, Scholefield, DeLeon & Co. Send feedback and questions to lawsofeve@yahoo.com or Lifestyle@gleanerjm.com.