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?

In the context of UK family law, a property adjustment order refers to a legal order that allows the court to redistribute property and financial assets between spouses or civil partners in the event of a divorce or dissolution of a civil partnership.

This order can be sought during or after divorce proceedings.

The primary purpose of a property adjustment order is to achieve a fair division of assets, taking into account the financial needs and contributions of both parties, including any children involved.

When considering a property adjustment order, the court takes into account various factors, including:

• Each party’s financial needs, obligations, and resources
• Contributions made by each party to the welfare of the family, both financial and non-financial
• The welfare of any children, including their housing needs

The court can make various orders under this umbrella, including transferring property from one party to the other, the sale of property, or the settlement of property rights.

The court has the discretion to decide how to redistribute the property to achieve fairness based on the case’s individual circumstances.

This may result in an immediate transfer of property, or an agreement to transfer the property later, for instance when children finish 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 up their home between themselves, it will be left up to the court to 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 (eg when any children finish full-time education or reach the age of 18).

A property transfer may necessitate also 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 to put the property on the market in the consent order so that neither party can back out later on.

What types of court orders can be issued?

The court has wide powers to make orders in respect to 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 the other (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 re-marriage 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:

• Consent Orders – 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 deal with the property, the ensuing Consent Order needs to 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 that are looking to put their property assets into a legally binding financial order, to ensure no claims by either party can be made 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.