Lauren Preedy – Senior Solicitor – Head of Divorce Team

Property and Divorce

There are separate pages about maintenance issues and pensions, but a key part of resolving the financial side of the divorce is deciding how to deal with the couple’s property.

Property Adjustment Orders

This is the name for the order which requires one of the couple to transfer their interest in a property to the other. Orders can be transferred to the minor children of the family or adult children of the family who are still in education or where there may be special circumstances such as disability. This can extend to requiring the variation (for the benefit of the parties or their children) of a prenuptial or postnuptial settlement.

Timing

legal 500 leading firm logoA property adjustment order cannot take effect until the granting of a decree of divorce, nullity or dissolution has been made absolute/final.

What is property?

There is no definition of property in Divorce Law. However, it generally includes buildings, land, shares, and policies as well as anything that is capable of being valued in money or money’s worth. This can include including assets in a partnership, a council tenancy, or a tenancy in the private sector.

Does this extend to overseas property?

In short, yes – the Court will assume that a foreign court will enforce its order in the absence of any evidence to the contrary. The Court has the power to make property adjustment orders regarding overseas property. If it were clear that a foreign court would disregard a UK order – then the court would still be able to take the value of that property into account when it divided up the property of the couple as a whole.

Valuations

The Court will normally expect the couple to agree between them what is a reasonable value for the couples different property. If agreement cannot be reached then the court will order that an independent expert provide a valuation.

For houses and other real estate the starting point for agreeing a valuation is normally for each of the couple to obtain an open market appraisal of the value of the property by an estate agent.

Where expert valuers are to be appointed – this would require the permission of the court. The reason for this is to avoid multiple experts being instructed and then court time being wasted by disagreements between experts. The preferred approach is for a single joint expert to be appointed. Normally the single joint expert would be agreed between the parties – but failing this the court may appoint an expert itself.

Third-party interests

if a court is considering making a property order it must also consider any dispute concerning the ownership of the property. This may mean a consideration of the rights of third parties. At a very simple level notice of divorce financial proceedings need to be provided to any mortgage company – because a mortgagee is very obviously an interested party. In most cases there is no intervention by the mortgage company.

Third parties who might intervene could be tenants or elderly family members who could be affected if an order were made to sell what would be their home as part of the divorce settlement. Or perhaps the parents of one of the couple, who may have loaned money to the couple to purchase a house.

The effect of remarriage

a property adjustment order cannot be made in favour of one of the couple if they have subsequently remarried or formed a civil partnership – unless they made application to the court prior to the remarriage or civil partnership.

Every case is different

Of course, that the court can make an order does not mean that it should or will.

Every family is different, and the outcome of every case is specific to the history and needs of that family. That is why it is important that anyone considering a divorce takes legal advice.

We are fortunate to have a very strong divorce team who will be happy to assist.

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