Part and parcel of getting divorced or dissolving a civil partnership includes dividing the matrimonial assets. In most relationships, this encompasses the family home. A Mesher Order, named for the 1980s case that developed the idea, postpones the sale of the matrimonial home, preventing it from being sold for a defined period, or until a “trigger” event occurs. Depending on the terms of the order, the property can remain in both parties names, even if the couple has divorced, until it is sold, and the proceeds are divided between the parties according to the terms of the order. But what happens to a mortgage during this time and who pays it? Read on to find out.
Part and parcel of getting divorced or dissolving a civil partnership includes dividing the matrimonial assets. In most relationships, this encompasses the family home. A Mesher Order, named for the 1980s case that developed the idea, postpones the sale of the matrimonial home, preventing it from being sold for a defined period, or until a “trigger” event occurs. Depending on the terms of the order, the property can remain in both parties names, even if the couple has divorced, until it is sold, and the proceeds are divided between the parties according to the terms of the order. But what happens to a mortgage during this time and who pays it? Read on to find out.
If you have a family issue and you require legal advice to understand your options, contact specialist family law solicitor Rebecca Calden-Storr of Stowe Family Law. With over 20 years’ experience, she is regularly instructed on matters arising from relationship breakdown, including divorce, financial disputes, complex assets, and disputes relating to children.
How does a Mesher Order work with a mortgage?
As stated above, the property may remain in both parties names or be transferred into the party’s name who will be living there, leaving the other party’s interest secured over the property by a charge. This charge protects the interest of the non-occupying party and will be paid in the percentage stated once the property is sold.
Typically, even if a property is transferred into the occupying party’s sole name, the mortgage lender may refuse to release the non-occupying party from their mortgage covenants. Particularly if the occupying party doesn’t have sufficient earning capacity to satisfy lending requirements.
If the mortgage remains in joint names, then both parties will be liable to pay if the occupying party cannot or fails to pay. This could be used as an event that triggers a sale and protects the non-occupying party from having to make payments indefinitely, or having their credit rating adversely affected.
The downside to this is twofold: first, the non-occupying party may not be able to take out a mortgage for a home because they remain affiliated with a previous property, and second, you will stay connected to an ex, when you may otherwise have been able to move on. In addition, the triggering event for a sale may be many years ahead, arguably leaving both parties in a state of limbo.
Mesher Orders are generally only made when the occupying party can satisfy the mortgage payments themselves without receiving financial assistance, apart from any spousal or child maintenance, from the non-occupying party. Of course, this depends on the parties’ finances, so if the non-occupying party earns significantly more than the other, then they may be ordered to pay the mortgage payments. This will need to be discussed and agreed during financial settlement negotiations.
It is important to note that Mesher Orders are only available on the family home, so if you are letting out a property, unless this is to become home to you or your ex, then it is not available on other mortgaged property.
How long does a Mesher Order last and what are the trigger events?
There is no single time that a Mesher Order will last for, but there are some common events that can trigger a sale. A trigger event is described as either a tangible or intangible barrier or occurrence, which, once met, causes another event to happen. Examples of trigger events are:
- The youngest child reaching the age of 18
- The youngest child leaving full-time education
- The youngest child permanently leaving home
- If the occupying party cannot or fails to make the mortgage payments for a specified period of time
- When the occupying spouse permanently lives with another partner or remarries/enters into a civil partnership
How do you enforce a Mesher Order?
If your ex is unwilling to comply with the terms of the Mesher Order after it has been approved by the court, then you can take legal action to enforce its terms. In addition, if any of the triggering events referred to in the order have occurred, it is the responsibility of both parties to ensure that the order is implemented, as it is not automatic. Sometimes this doesn’t happen immediately, particularly if the occupying party is unwilling or unable to raise a sum sufficient to pay the non-occupying party and/or is resisting a sale to enable this to happen. In this instance, the non-occupying party can apply to enforce the order by making an application for an Order for Sale.
It is important that any enforcement action is taken as soon as possible, as delays can impact the likelihood of success. The general rule regarding costs is that both parties are responsible for their own; however, with enforcement proceedings, the court may make an order for costs against the party who has failed to comply with the original order. This can include any court fees or legal fees incurred, although it is rare for one party to be ordered to pay all the other’s costs.
What are the advantages of a Mesher Order?
The main benefit of a Mesher Order is that you can limit the amount of stress and emotional upheaval to any children of the family. This is because you won’t be forced to immediately sell the family home, which helps to minimise disruption. A Mesher Order also helps put the children’s welfare first, allowing you to maintain a stable home environment and keep them in their school until they either turn 18 or leave full-time education.
A Mesher Order is beneficial in cases where buying another property is too expensive, or does not come with the same favourable terms as your current mortgage arrangement.
What are the disadvantages of a Mesher Order?
As already discussed, a Mesher Order can keep you financially intertwined with your ex for longer than you’d otherwise have wished. If you preferred a clean break, a Mesher Order is probably not the best choice.
Having a Mesher Order in place is really only a temporary solution. Eventually, one of the trigger events will occur and the property will need to be sold. It is therefore important to have a plan and prepare yourself for when this day arrives.
Any capital you and your ex have invested in the property will be tied up for months, and more commonly, years. Without it, you could struggle to obtain a mortgage on another property or be required to rent an additional property for many years.
When the property is eventually sold, the non-occupying party could be liable for capital gains tax, if, in the intervening period, they buy another home as their primary residence.
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