The Family Law Act of British Columbia is the provincial legislation that governs the division of property in British Columbia. The property division scheme under the Family Law Act applies to married spouses and unmarried spouses who are cohabiting in a marriage-like relationship for at least two years (sections 3 and 81).
Spouses in either of these two categories may apply to court for a division of property. Applications for property relief under the Family Law Act must be made in the Supreme Court of British Columbia and not the Provincial Court of British Columbia.
Family Property & Excluded Property
There are two categories of property under the Family Law Act: “family property” and “excluded property”. Family property is shared at separation and excluded property is kept separate.
Family property is defined in section 84 of the Family Law Act as the real and personal property that one or both spouses own during their relationship and before separation. Examples of family property may include the family home, RRSPs, pensions, bank accounts, investments, insurance policies, and shares or interests in a corporation. Generally, each spouse is entitled to one half of family property.
Excluded property is defined in section 85 of the Family Law Act. Examples of excluded property can include property that was acquired by one spouse before the relationship began, inheritances and gifts to one spouse, insurance proceeds, settlements or awards of damages, and certain trust property.
There are certain exceptions to these general rules. For example, the increase in the value of excluded property that occurs during the relationship is divisible. Further, property acquired by one spouse after separation could still be considered family property if it was acquired by using family property or proceeds from the disposition of family property.
As with family property, the debts that either spouse or both spouses incurred during the relationship are divided equally between the spouses. After separation, spouses are responsible for their own debt that they continue to incur. However, family debt incurred by one spouse after separation is still divided equally between the spouses if the debt was incurred in order to maintain family property. Family debt is dealt with in section 86 of the Family Law Act.
Valuation of Family Property and Family Debt
The valuation of family property and family debt is determined either at the date of an agreement is made that divides the family property and family debt, or upon a hearing before the court with respect to the division of family property and family debt. This means that although family property is split at the time of separation, both parties may be subject to fair market increases or decreases in property values until an agreement is made or trial begins. Section 87 of the Family Law Act provides the legal basis for valuation.
Temporary Orders Respecting Property
Applications can be made in court for temporary orders with respect to the family residence or for temporary orders to protect family property.
Before a final determination is made on the issues arising from separation, the court, pursuant to section 89 of the Family Law Act, can make an order for the interim (temporary) distribution of family property to fund for the purpose of resolving a dispute, such as for legal fees, or alternative dispute resolution fees, or for hiring an accountant or business valuator to determine the fair market value of property or businesses.
The court, on application under section 90 of the Family Law Act, can also make orders that provide a spouse with exclusive occupancy of the family residence and possession of personal property at the family residence, to the exclusion of the other spouse. A spouse can also apply to court under section 91 of theFamily Law Act for an order restraining a spouse from disposing of any property before a final determination is made.
There are important time limitations to consider when applying for relief under the Family Law Act for a division of property. Married spouses must bring an application for property relief within two years of the date of divorce or a declaration of nullity (s. 198(2)(a). Unmarried spouses must bring their applications within two years of the date of separation (s. 198(2)(b). We encourage you to contact our office so we can discuss these important timelines with you and take immediate steps to preserve your property claims.