Understanding Property Adjustment Orders in Divorce UK

One of the biggest assets upon divorce is often the matrimonial home. As a result, many of the disputes between divorcing spouses hinge on how to deal with the property upon separation.

Often they can decide between themselves what to do with the property. If they cannot reach an agreement, a court will need to intervene and decide on the best course of action.

What is a property adjustment order?

A property adjustment order in the UK is a legally binding order made by the Family Court under the Matrimonial Causes Act 1973. It gives the court the power to adjust, transfer, or otherwise redistribute property and other financial assets between spouses or civil partners upon divorce or dissolution.

An application for a property adjustment order can be made during the course of divorce or dissolution proceedings, or after the final order has been granted, as part of the wider financial remedy process.

The overarching aim of a property adjustment order is to achieve a fair outcome between the parties. In practice, this often means deciding who will own or occupy the former matrimonial home and on what terms.

When asked to make a property adjustment order, the court must consider a range of statutory and practical factors, including (among others):

• Each party’s income, earning capacity, property and other financial resources (both current and reasonably foreseeable)
• Each party’s financial needs, obligations and responsibilities
• The contributions each party has made, or is likely to make in the foreseeable future, to the welfare of the family – whether financial (for example, earnings) or non‑financial (for example, caring for children or running the home)
• The welfare of any children of the family, including their housing and stability needs

Under the umbrella of a property adjustment order, the court can:

• Transfer legal and/or beneficial ownership of a property from one party to the other
• Order the sale of a property and specify how the net sale proceeds are to be divided
• Vary or otherwise settle the parties’ respective property rights

The court enjoys broad discretion in deciding how property should be divided or redistributed, with a focus on fairness in the particular circumstances of the case.

Depending on what is fair, the outcome may involve an immediate transfer or sale of the property, or a deferred arrangement so that the transfer or sale takes place at a later date – for example, when any children complete full‑time education or reach the age of 18.

Why would I need a property adjustment order?

A divorcing couple will need a court to issue a Property Adjustment Order to provide legal standing to a financial agreement if this involves the family home.

If they cannot decide how to divide their home between themselves, the court will impose a financial settlement.

Here are the two most common actions couples take when agreeing on how to separate the family home as part of the overall financial settlement:

1) Property Transfer – This is where ownership of the matrimonial home is transferred to one spouse. This may be an immediate transfer or an agreement to transfer the property at a later date (e.g., when any children finish full-time education or reach the age of 18).

A property transfer may also involve transferring a mortgage or converting a joint mortgage into an individual mortgage.

2) Property Sale – Although this isn’t strictly speaking a property adjustment order, selling up is one of the most common ways of dealing with the matrimonial home.

It is important to include an agreement in the consent order to put the property on the market so that neither party can back out later.

What types of court orders can be issued?

The court has wide powers to make orders regarding divorce and property. The most common property adjustment orders the court can make are often for:

• delaying the sale of a home, for example, until the children have completed their education
• transferring the home from one person to another (property ownership)
• selling the home and dividing the proceeds fairly

Further to this, here are the specific court orders a Judge may order:

• Mesher Order – A mesher order is essentially the opposite of an agreement to sell the home. It provides for the postponement of the sale of the family home, allowing one of the divorcing parties to remain living in the property for a certain period or until a so-called ‘trigger event’. Commonly, this will involve the former wife remaining in the property with the children until the children finish full-time education or reach the age of 18 (the trigger event).
• Martin Order – This goes further than a Mesher Order, in that it provides for an indefinite postponement of the sale of the property. The party that is granted residency in the home will often be able to carry on living there for the rest of their lives, subject to certain ‘trigger events’ such as remarriage or if they voluntarily vacate the property.

How do I get a Property Adjustment Order?

There are two ways of getting a Property Adjustment Order:

• Financial Consent Order – these are used to provide legal standing to financial settlements upon divorce. A consent order is essentially a written document that sets out what has been agreed upon between the divorcing parties – in this case, regarding how to deal with the matrimonial home. The Property Adjustment Order will essentially form part of the Consent Order.
• Family Court – if the divorcing couple is unable to agree on how to deal with the family home, and mediation does not help, they will need to go to court, which will impose a decision via a financial order. In this case, the Property Adjustment Order will form part of the financial order.

Does the court need to be involved?

The court will always need to be involved in some capacity when making a Property Adjustment Order.

Even if the divorcing parties agree on how to divide the property, the resulting Consent Order must be approved and sealed by the court before it becomes legally binding.

Who needs to apply for a Property Adjustment Order?

A Property Adjustment Order is for couples who want to put their property assets into a legally binding financial order to ensure neither party can make claims in the future.

A Property Adjustment Order is often drafted by a high-street or family solicitor as part of a Consent Order, which is then submitted to the court for approval.

However, to save money, you can obtain a fixed-fee Property Adjustment Order with the help of Divorce-Online, the UK’s leading provider of online divorce and financial orders.