Understanding the Property Adjustment Order in Divorce

A property adjustment order is a type of financial order made by the court during divorce proceedings in England and Wales that changes how property is owned or dealt with. It is most commonly used in relation to the family home, allowing the court to transfer, sell, or postpone the sale of a property as part of a fair financial settlement. This article explains what a property adjustment order is, when the court may make one, and how it can affect the ownership or occupation of the family home or other property.

When is a Property Adjustment Order needed in divorce?

One of the hardest aspects of negotiating a divorce is the financial settlement especially when it involves property. Not only are there financial implications of dividing property if it’s the matrimonial home, for many there are practical and emotional implications. Everyone needs a roof over their head and whilst it may just be bricks and mortar, we do get emotionally attached to our family home.

If you are not the legal owner of the property, it is also worth registering your matrimonial home rights at an early stage, as this protects your right to occupy the home while the financial settlement — including any property adjustment order — is being resolved.

Who gets the house in divorce is hugely disputed area and often the separating couple cannot reach an agreement even with mediation or solicitor lead negotiations. When no agreement can be reached the family Court may need to step in and issue a Property Adjustment Order.

What is a Property Adjustment Order?

A Property Adjustment Order is a legal document issued by a Court that outlines how a couple’s assets and property will be divided in a divorce. This order can be requested by either party or can be issued by the Court if the couple is unable to come to an agreement on their own. It is important to note that a Property Adjustment Order only applies to marital property, which is any property or assets acquired during the marriage.

How is a Property Adjustment Order Determined?

When determining a Property Adjustment Order, the Court will consider a variety of factors, including the length of the marriage, the financial contributions of each party and the needs of any children involved. The Court will also consider any prenuptial agreements that may have been signed before the marriage. It is important for both parties to provide accurate and detailed information about their assets and financial situation to ensure a fair decision. The financial disclosure is normally submitted by the Form E and either lying, or failing to disclose financial information can have severe consequences.

What are the possible outcomes of a Property Adjustment Order?

A Property Adjustment Order can have various outcomes depending on the specific circumstances of the divorce. Here are some possible outcomes:

1. Sale of the property: The Court may order the sale of the property and the proceeds will be divided between the parties according to their respective shares.
2. Transfer of ownership: The Court may order the transfer of ownership of the property to one party, while the other party receives compensation in the form of other assets or a lump sum payment.
3. Mesher order: A Mesher Order is a type of Property Adjustment Order where the property is not sold immediately, but one party is allowed to remain in the property for a longer period, such as until the youngest child turns 18. The property will then be sold, and the proceeds divided.
4. Martin order: A Martin order is similar to a Mesher order, but it allows one party to remain in the property for life or until they remarry or cohabit with another person. The property will be sold, and the proceeds divided upon the occurrence of certain events.

How do I get a Property Adjustment Order?

The Property Adjustment Order is likely to form part of the overall divorce financial settlement which will eventually be legally finalised with a Consent Order or a Clean Break Order (or both). Here are the general steps to obtain a Property Adjustment Order:

1. Consult with a family law solicitor: It is advisable to seek legal advice from a family law solicitor who specialises in divorce financial settlements. Tyrer Roxburgh can help. We will guide you through the process and help you understand your rights and options.
2. Make an Application for Divorce: Start by completing a divorce application to initiate divorce proceedings if you haven’t already. A Financial Order for divorce, including the Property Adjustment Order can only be issued after the application for divorce has begun and most people wait until the Conditional Order has been issued.
3. Financial disclosure: Both parties will need to provide accurate and detailed information about their assets and financial situation. This is usually done through a financial disclosure form, such as Form E.
4. Negotiation and mediation: Attempt to reach an agreement with your spouse regarding the division of property. Mediation can be helpful in resolving disputes and reaching a mutually acceptable settlement and the Family Court, with a few exceptions, is unlikely to intervene until a Mediation Information & Assessment Meeting (MIAM) has taken place.
5. Court application: If you and your spouse are unable to reach an agreement, you may need to apply to the Court for a Property Adjustment Order. Your family law solicitor will help you prepare the necessary documents and present your case to the Court.
6. Court hearing: The Court will review the evidence and arguments presented by both parties. They will consider various factors, such as the length of the marriage, financial contributions, and the needs of any children involved, to make a fair decision.
7. Court order: If the Court determines that a Property Adjustment Order is necessary, they will issue a legal document outlining how the assets and property will be divided.

Seek Legal Advice

A Property Adjustment Order can have a significant impact on a divorce settlement. It will determine how assets and property are divided, which can greatly affect the financial stability of both parties after the divorce. It is important for both parties to carefully consider their options and seek legal advice before agreeing to a Property Adjustment Order. The Team at Tyrer Roxburgh can help starting with a fixed fee, divorce consultation.

For an overview of all financial orders available please visit Financial Orders in Divorce.

Frequently Asked Questions

What is a property adjustment order?

A property adjustment order is a financial order made by the court in divorce proceedings that changes how property is owned or dealt with. It can require one spouse to transfer their interest in a property to the other, postpone a sale, or make other arrangements relating to property ownership. Property adjustment orders are often used where the family home is one of the main assets in the marriage. The court will consider the full financial circumstances, including housing needs, children’s needs, income, mortgage capacity and the overall fairness of the settlement.

How much is a property adjustment order?

There is no fixed amount for a property adjustment order because it depends on the value of the property, the equity available, the mortgage, each person’s financial needs and the overall divorce settlement. The order may involve transferring a share of property, selling a property, or allowing one person to remain in the home for a period of time. There may also be court fees and legal fees. If the order is agreed and submitted as part of a consent order, the court fee is usually lower than if one party makes a contested financial remedy application.

What is the difference between a Mesher order and a Martin order?

Both are types of property adjustment order that postpone the sale of the family home rather than selling it immediately. A Mesher order allows one spouse to remain in the property until a specified trigger event, most commonly until the youngest child reaches 18 or finishes full-time education, after which the property is sold and the proceeds divided. A Martin order goes further, allowing one spouse to remain in the property for life, or until they remarry or cohabit, before the property is sold. Which is appropriate depends on the needs of the parties and any children.

Can a property adjustment order be made after divorce is finalised?

A property adjustment order should ideally be dealt with as part of the financial settlement before the divorce is finalised and recorded in a court-approved order. If financial matters are left unresolved, claims can potentially remain open and be pursued later, which creates uncertainty. Finalising the financial settlement through a consent order, ideally including a clean break, is the best way to achieve certainty and prevent future claims relating to property.

Do I need to go to court to get a property adjustment order?

Not necessarily. If you and your spouse can agree how property should be dealt with, the terms can be recorded in a draft consent order and submitted to the court for approval without the need for contested hearings. If agreement cannot be reached, an application to the court starts the financial remedy process, which involves financial disclosure and may require one or more hearings before the court decides whether a property adjustment order is appropriate.