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A Mesher Order, or an ‘order for deferred sale’, effectively delays the sale of the matrimonial or family home, with one party remaining in occupation of the property until an agreed trigger event – such as a youngest child’s 18th birthday or them leaving school or college.
The terms of a Mesher Order may be decided by the court or potentially agreed between the parties. There is often some scope for negotiation and this is where experienced legal advice is very valuable.
Mesher Orders are a common part of divorce finances where there are children and where there are limited funds and especially where :-
it would be detrimental and unfairly prejudice one party/dependent children to immediately sell the property. For example, when there is not enough capital in the matrimonial assets to meet the parties’ housing needs.
where there are young children whose housing needs take priority and the parent caring for the children has limited financial resources and unable to re-house suitably.
Common trigger events resulting in a sale of the property are :-
The youngest child reaching 18 years or ceasing full-time education.
On the re-marriage of the party occupying the property.
If the party occupying the property co-habits for a period of 6 months or more.
On the death of the party occupying the property.
When the property is no longer the occupying party’s primary residence.
If the parties’ financial circumstances change, the parties can also agree to sell the property before any of the triggering events occur.
Mesher Orders can be an appropriate way to deal with the family property with minimal disruption to family life. If the immediate sale of the family home would cause personal or financial hardship, Mesher Orders are particularly attractive.
Mesher orders are financially attractive particularly :-
Where one party does not have the financial ability to take over the mortgage alone and release the other from the mortgage terms, costs can be saved when transferring the property to the receiving party.
The capital value may increase over time whilst both parties maintain their shares in the property.
If the housing market is depressed, a deferred sale may benefit until such a time as the market has recovered whilst continuing to provide a home for the party and dependent children.
Mesher Orders are a pragmatic option however are not suitable in all cases as there are disadvantages. These orders :-
Tie the parties financially as they remain linked in respect of the property. Where there is acrimony, this arrangement could potentially lead to further polarisation of the parties.
With capital being tied up in the family home for so long, the non-occupying party may find it difficult to raise a new mortgage and purchase another property in the interim, with the additional costs such as higher Stamp Duty Land Tax or higher mortgage interest rates for a second property.
A Mesher Order can also bring about Capital Gains Tax consequences which may require expert tax advice.
The non-occupying party may find themselves having to apply to the court for an order for sale to recover their capital.
Should you wish to discuss any aspect of divorce, finances on divorce or Mesher Order issues, please do get in contact.
Get in touch
If you would like to speak with a member of the team you can contact us on:
Lead Partner - Family law
