During the divorce process, there are many financial matters to be sorted out. One of the main issues to resolve can be what to do with the family home and whether it should be sold. One common issue arises when the wife/mother wishes to continue living in the family home with the children after the divorce.
In such circumstances, when children are involved, a Mesher order can be used to reach a short term compromise to the problem of what to do with the family home
What is a Mesher Order?
A Mesher Order sometimes known as an ‘ordered for deferred sale’ is an order issued by a court which determines how the family home shall be managed after divorce. The order allows for the sale of the family home to be deferred until a point in the future when a specific eventful or milestone will trigger the house being put on the market.
Common trigger events can be:
- The person living in the house remarries or starts cohabiting with a new partner
- Cohabitation for a defined period expires
- The children reaching a certain age, this is normally 18 when they have finished full-time education
As with most matters during divorce, there is no perfect solution, which suits both parties. Before applying for a Mesher order it is important to be aware of how they work, various issues which may arise, and the alternative options.
Who pays the mortgage?
Under the terms of Mesher order, the Family home remains in the joint names of the divorced couple. However, this does not necessarily mean, that they both continue to pay the mortgage. Even if one party is paying maintenance, it may be possible to reduce or avoid completely having to pay mortgage contributions.
Why apply for Mesher order
Delaying the sale of the house can most certainly offer some continuity during a highly stressful and emotional time for all parties involved, particularly children. During important school years such as GCSE’s or A Levels keeping the family home may mean that the children do not have the upheaval of moving to a new school and making new friends and could be one of the best ways to protect children’s welfare during a divorce
- Putting your children first. Minimise the impact on their lives.
- Keeping the children in the same school
- Minimising stress and the emotional impact on all parties of selling the family home
So those are of some of the reasons why you may wish to apply for a Mesher order, however, in the long term there may also be significant financial concerns
Problems with Mesher order
For the one that moves out.
Moving out means leaving a significant amount of capital tied up in the family home. This will make it harder to move on and set up a new home. Existing mortgage commitments will reduce your mortgage capacity and make it harder to get the new mortgage on a new home. However, it can be possible to reach an agreement with your former spouse whereby if they remain the property they take on the full mortgage payments.
If after the order has expired you have purchased a new ‘principal residence’ then there may well be capital gains tax to pay on the sale of the old house.
For the one who stays.
When issuing a Mesher order, indeed with all issues in divorce the court will consider the welfare of the children above all else. Whilst there are clear benefits to the children in keeping the family home, it can have a detrimental effect on the financial situation of both the separated parents.
For the one who stays in the family home, you will still have to sell the property at some point in the future, and when that time does come there are no guarantees that they will be in a better financial situation. Questions you should ask should be:
- Will I be able to increase my income over the period?
- Will I have enough capital to buy in a future housing market?
- Will I be able to get another mortgage?
A Mesher order can help soften the emotional blow of divorce by keeping the family home and offering some much-needed continuity for the children. Whilst the benefits of this can not be underestimated, particularly if the alternative would mean uprooting children to a new area with now school, in our experience it rarely makes financial sense in the long run.
There is no guarantee that once the order expires that either partner will be in a better financial position to buy a property. At the end of the day, two houses will always cost more than one. Dividing the assets of the marriage and trying to build new, separate lives can often be the best option in the long term.