Can I stay in the family home until the children are older?

I am receiving an increasing number of enquiries from people interested in retaining the family home jointly with their spouse, until a specific time in the future, such as when the children are older.

This is not a straightforward option. It is not a clean break, and it is not an outcome given lightly by the courts (unless agreed), but it is a potential option in some cases. This blog post explains how this might work and when it might be a suitable option.

"Mesher" orders

These types of orders gained popularity in the 1980s and 1990s, as a way of maintaining a home for a party, most commonly with children, where otherwise they might be unable to house or the outcome would be unfair. Essentially, they are deferred orders for sale.

A deferred order for sale, where the date of sale is related to children is commonly called a "Mesher" order. This is named after a case that developed the practice. A deferred order for sale where there are no children is called a "Martin" order, again after a case that developed this, but these are a lot less common. This blog will primarily talk about Mesher orders.

A Mesher order is, in short, an order that creates a trust of land and retains the family home in shared ownership in defined shares, but usually only one spouse and the children would occupy the home, with the other moving out. Triggers are specified that would mean a sale should then take place when the trigger occurs. Common triggers include the youngest child reaching a certain age or stage of their education, remarriage or death of the occupying party, or further order. Once one of these triggers happens, the house would be sold, and divided according to the percentages stated in the order. Sometimes the occupying spouse might be in a position to buy out the other's interest by then.

The percentages may or may not be equal and that depends on all the circumstances. Who pays the mortgage is also something to be determined, depending on circumstances.

There are a number of factors that might mean a Mesher is unsuitable, and that includes whether it is possible for the mortgage to be paid as well as the non-occupying owner to afford to live elsewhere, and whether it is fair to keep the non-occupying spouse from their money (and tied to a mortgage preventing them buying elsewhere) for potentially years to come,. Also, whether there is another option - for example, could housing needs be met if the person seeking the Mesher received a higher percentage of the equity if there was a sale, ie. is there another option? It is also important to note that it is not a clean break, and courts do have a duty to consider whether a clean break can be achieved.

Transfer of property with charge-back

Sometimes a party might be able to remove the other party from the mortgage, but not be in a position to give the other party a fair lump sum in return for the property. In those circumstances, a charge can be registered against the home to be realised in the future. It would sit in line behind the mortgage, and would often be specified as a percentage of the value. Again, there might be triggers similar to a Mesher order. When those triggers happen, the house is either sold, or if they are able, the occupying party might buy out the interest and the charge would be removed.

This can be more appealing than a Mesher, simply because one of the downsides to a Mesher order is that the parties remain on a joint mortgage together, which means that the non-occupying spouse (a) could face a liability or harm to their credit rating if the mortgage is not paid, and (b) often cannot get another mortgage while their name is still on the joint one. However, it still needs to be carefully considered because it keeps one party from their money, is not a clean break and might restrict their own options.

To conclude

Both of these options exist mainly so that housing can be provided for a child or children, that might not otherwise be possible. Whether they are suitable or viable in your case is something to take advice on. If such an option is agreed between you, then it should still be recorded in a consent order, so that everyone is clear who gets what in the future, who pays the mortgage, and what would trigger a sale.

If you would like to discuss any of this further, please get in touch here.