Sale of property
Divorce or the dissolution of your civil partnership can be far from straightforward, especially when property is involved. Whether property (usually the family home) is owned by one or both of you, it is often the largest financial asset to be dealt with.
What order will be made?
Various different orders can be made by the court to determine how property will be dealt with. The order made regarding your property will depend entirely on your particular circumstances.
Order for sale
The court can order that the property should be sold with the proceeds of the sale divided between you in accordance with any agreement that has been reached between you or in such proportions as the court decides according to your specific needs, earning capacities and mortgage raising abilities. If you are in the fortunate position of there being sufficient equity in the property which allows both of you to suitably rehouse, then this is likely to be the most favourable option.
Transfer of ownership
Sometimes there simply isn’t enough equity in the sale of the home to be divided and provide both of you with the means to purchase an adequate home. This is especially true if you have children. In this instance, it may be more appropriate for one of you to stay in the property with the children.
If you remain in the property then it may be the case that the home is transferred into your sole name. A lump sum payment will often be required from the other person as compensation for the loss of their interest.
Sometimes it’s helpful for both of you to maintain your interest in the family home, for instance if there are insufficient assets to give the non-resident person compensation for the loss of their interest. If this is the case then it’s possible to put in place what’s known as a “Mesher Order”. A Mesher Order means that the home will remain in the joint ownership of both of you, but only one of you will have the right to occupy the property. This will usually be the parent who has care of the children. This arrangement will continue until a trigger event is reached e.g. once the youngest child turns 18, or if the person who is living in the house gets re-married, at this point the house can be sold and the proceeds divided between you both in the proportions agreed at the time the order was made. A similar arrangement can arise where there is a deferred charge with certain triggers determining when the charge has to be redeemed. This is more likely to happen where the home is transferred to one of you and assumes that the other person can be released from their mortgage covenants. Nowadays this can be quite difficult to achieve.
If there’s insufficient equity to enable both of you to re-house straight away, the order made will be dependent on a number of factors, such as:
- Your individual mortgage raising capacities
- The earning capacities of you both
- Other assets involved
- Whether there are children involved who need to be re-housed
We understand just how complex financial claims surrounding property can be. This is why we offer supportive advice and guidance through every step of the process. If you’re dealing with divorce or the dissolution of a civil partnership, and want to get your financial affairs in order, then let us help you.