23 May 2011

Protecting Property

Important Update: The Family Law Act was introduced on 14 November 2011 and contains a number of provisions which are critical to the comments made in this post. See my posts "The Early and Unlamented Deaths of ss. 90 and 120.1: Government takes quick action on parental support and unmarried persons' property agreements" and "Family Law Act Introduced!" for more information.

When a relationship has come to an end, it's usually a good idea to take steps to preserve the assets available for distribution between the parties. I'm not saying that every time a couple splits up one of them will be up to no good, but it usually pays to be cautious and careful. If your ex does decide to try and play games, it can be expensive to undo the damage. In this post, I'll review some of the common and not so common ways that property can be protected. Note that some remedies are only available to married couples, and that most remedies require the commencement of court proceedings.

File an Entry Under the Land (Spouse Protection) Act

A married spouse can apply for an entry against the title of the family home under the Land (Spouse Protection) Act. The entry will stop the property from being sold without the consent of the person who obtained the entry. Here's the fine print:
  • The property must be located in BC.
  • The parties must not be divorced at the time of the application.
  • The entry only applies to property "occupied by the husband and wife as their residence," and which is owned by one or both spouses.
  • The application must be made within one year of moving out of the property.
The cool things about entries under the Land (Spouse Protection) Act are that they can be obtained without commencing a law suit and the other spouse is not normally notified about the entry. The bad news is that the act ceases to apply once a couple are divorced, which means that the entry, although still on title, will be ineffective to prevent the transfer of the property.

Register a Certificate of Pending Litigation
Married spouses and unmarried people can apply to register a certificate of pending litigation under the Land Title Act against the title of any real property to which they claim an interest. Once the CPL is registered, the owner will be unable to transfer title of the property or obtain a new mortgage until the CPL is canceled. Here's the fine print:
  • The property must be located in BC.
  • Litigation must have commenced in the Supreme Court, and the litigation must include a claim about the property proposed to be subject to the CPL.
  • The person applying for the CPL must be claiming an interest in the property in the litigation.
CPLs are registered with the Land Title and Survey Authority, after being stamped by the court where the litigation was commenced to confirm that the litigation includes a claim about the property the CPL is going to be registered against.

Apply for a s. 67 Restraining Order

A married spouse can apply for an order under s. 67 of the Family Relations Act to restrain the other spouse from selling the family assets or using them as collateral. A restraining order doesn't create an automatic bar to selling the family assets or using them to obtain a loan the way a CPL automatically prevents the transfer of land. Instead, if the person subject to the order breaches the order, he or she can be punished for contempt of court. Here's the fine print:
  • The restraining order covers real property and personal property located in BC, as well as personal property located outside the province.
  • Litigation must have commenced in the Supreme Court.
  • You must apply for the order in chambers.
The nice thing about s. 67 orders is that they are all but mandatory on the application of a party. If you need this order, you just have to apply for it and the court will give it to you.

Apply for an Injunction

Married spouses and unmarried people can apply for an injunction under Rule 12-4 of the Supreme Court Family Rules to stop the other party from dealing with assets, and the injunction can theoretically be as narrow or as broad as is required to accomplish the task. Again, the fine print:
  • The injunction can cover real property and personal property located in BC, as well as personal property located outside the province.
  • Litigation must have commenced in the Supreme Court.
  • You must apply for the order in chambers and the court may not make the order you want.
  • You must promise to make good any harm the other party suffers as a result of the injunction.
Married spouses and unmarried people can also apply for the same relief under s. 39 of the Law and Equity Act.

Apply for an Order for the Detention and Preservation of Property

Married spouses and unmarried people can apply for order for the detention and preservation of assets under Rule 12-1 of the Supreme Court Family Rules where there is a real risk that the other party will sell, damage or conceal property. The purpose of this order is to protect the assets from loss or a reduction in value, and can include a term requiring a party to deliver a specific thing to the other party. Here's the fine print:
  • The order can cover real property and personal property located in BC.
  • Litigation must have commenced in the Supreme Court.
  • You must apply for the order in chambers and the court may not make the order you want.
Married spouses and unmarried people can also apply for essentially the same relief under s. 39 of the Law and Equity Act.

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