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Mesher Orders



Fri 13 October 2023 Mesher Orders

What is a Mesher Order?

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. Following the trigger event, the property is either sold or transferred and the proceeds shared in accordance with the parties’ financial settlement.

Mesher Orders are likely to be used when 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.

These orders can be an appropriate arrangement 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 for Mesher Orders

Common trigger events resulting in a sale of the property (subject to the parties’ agreement / order) are :-

If the parties’ financial circumstances change, the parties can also agree to sell the property before any of the triggering events occur

The advantages of Mesher Orders

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. Effectively, these orders allow children and primary carers to continue living in their homes, attend the same schools and maintain a stable environment, usually until the children’s majority.

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.

The potential disadvantages of Mesher Orders

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.

Mesher Orders can also be problematic for the occupying party as it could place them in an uncertain position following the sale of the property. The occupying party may be unwilling to sell the home or unable to finance a mortgage due to age, income or their share of the sale proceeds may be insufficient to allow them to buy a new home. 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.


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