What is an interim order for sale and can I apply for one?
When separating couples own property together, one of the most difficult questions can be what happens to that property before a final financial settlement is reached.
The property may be the family home, an investment property, a holiday home or another jointly owned asset. In many cases, it may eventually need to be sold as part of the overall financial resolution. The more difficult question is whether it can, or should, be sold before the final outcome has been agreed or ordered by the court.
An interim order for sale can be useful in the right case, but it is not a shortcut around the financial remedy process. The court will look carefully at the legal basis for the application, the ownership of the property and the practical impact of ordering a sale before the final settlement is reached.
What is an interim order for sale?
An interim order for sale is an order made before the final financial settlement has been reached. It may require a property to be marketed and sold during the course of divorce and financial remedy proceedings.
This is different from an order for sale made at the final stage of a case. At the final hearing, the court has wider powers to decide how assets should be divided. At an interim stage, the position is more limited.
An interim sale may be considered where there is a practical reason for dealing with the property before the final settlement. For example, there may be mortgage arrears, increasing liabilities, a risk of financial loss or a need to release funds.
If you are concerned that a property may need to be sold before the final financial settlement, it is important to take advice early. The ownership structure, the reason for the proposed sale and the wider financial picture will all need to be considered.
When might an interim order for sale be considered?
An interim order for sale may be considered where:
A property is becoming unaffordable to maintain;
Mortgage arrears or other liabilities are increasing;
There is a risk of repossession or financial loss;
One party needs access to funds to meet necessary costs;
A sale has previously been agreed but one party later refuses to cooperate; or
There is another good reason why the property should be sold before the final hearing.
However, the court will not make an interim order for sale simply because one party wants access to funds, or because a sale may ultimately be likely at the end of the case. The court must be satisfied that it has the power to make the order and that the order is appropriate in the circumstances.
What will the court consider?
There are different legal routes by which an interim order for sale may be sought, including under property and family law legislation. The correct route matters, because the court must have the power to make the order being requested.
The court will usually need to consider a range of practical and legal factors, including the housing needs of both parties, their financial resources and the likely effect of making, or refusing to make, the order. Where children are involved, their needs and welfare will also be highly relevant.
In practical terms, the court will look at:
Who owns the property;
Whether the property is held in joint names or one party’s sole name;
Whether either party has a beneficial interest or home rights;
Whether vacant possession can properly be ordered;
The housing needs of both parties;
The needs of any children;
The financial resources available to each party;
The reason why a sale is being sought before the final hearing; and
The costs and litigation risk of making the application.
Why ownership matters
Ownership is often central to whether an interim order for sale can be made.
If a property is owned jointly, and one party has a beneficial right to occupy it, the court may be limited in what it can order before the final financial settlement. The court may be able to restrict or suspend occupation in some circumstances, but that is different from permanently bringing a party’s rights to an end through a sale.
This was the issue in RA v KS [2023] EWFC 102, where Jones Nickolds acted for the husband. The wife applied for a jointly owned holiday home to be sold before the final financial settlement was reached. The husband opposed that application.
The court found that it could not make the interim order for sale sought because it did not have power to permanently terminate the husband’s right to occupy the property, which he had as a beneficial owner.
The case is a helpful example of why the ownership structure matters. Even where there may be practical reasons for wanting a property sold, the court must first have the legal power to make that order.
The practical position can be summarised as follows:
If the property is in the sole name of the party applying for an interim order for sale, it may be possible for the court to make such an order. This will depend on the facts, including whether the other party has home rights and whether those rights can properly be brought to an end.
If the property is held in joint names and one party opposes an interim order for sale, the court may not have the power to make the order sought, because it cannot simply terminate that party’s beneficial right to occupy the property at an interim stage.
If one party has no beneficial interest in their spouse’s property, or a property is jointly owned but the other spouse does not agree to the property being sold at an interim stage, it may be necessary to consider whether a separate application in accordance with property, rather than matrimonial, law is appropriate.
A separate application in relation to a specific property should be approached with care where financial remedy proceedings are already underway. The court will usually want to consider the wider financial picture rather than determine one property issue in isolation.
Costs and litigation risk
The judgment in RA v KS provides a warning to all parties when considering their approach to litigation. Satellite litigation, meaning interim and freestanding applications within ongoing financial remedy proceedings, carries potential costs consequences.
The parties in this case were reminded that costs were a live issue when W first canvassed the idea of an interim order for sale. Despite the warnings, W went on to pursue the application and, as set out above, she was unsuccessful.
As a result, W was ordered to reimburse H 80% of the costs he had incurred in defending the application.
This is a useful reminder that interim applications should be considered carefully. Where an application is weak, poorly evidenced or brought without the right legal basis, there may be costs consequences.
Open offers and agreed sales
W sought to argue that, if the application under MWPA was unsuccessful, H should be prevented from standing in the way of a sale of the barn because he had previously proposed openly that it be sold. W’s counsel submitted that this was a promise that H should be held to. Recorder Allen KC found that it would be wrong to characterise an unaccepted offer as a promise capable of founding an estoppel.
The practical point is that an open proposal to sell a property does not necessarily mean that party can later be forced to proceed with a sale. The terms, timing and acceptance of any proposal will matter.
Can I apply for an interim order for sale?
You may be able to apply, but it will depend on the circumstances. Before making an application, it is important to consider:
Who owns the property;
Whether the property is held in sole or joint names;
Whether there are home rights or beneficial interests;
Why the sale is needed before the final hearing;
Whether there are children or housing needs to consider;
Whether the sale would release necessary funds or avoid financial loss;
Whether there are other ways to resolve the issue; and
The costs risk if the application is unsuccessful.
An interim order for sale can be useful in the right case, but it is not straightforward. Early advice can help identify whether the court is likely to have the power to make the order and whether the application is proportionate.
How Jones Nickolds can help
At Jones Nickolds, we advise on financial remedy proceedings involving family homes, investment properties, holiday homes and complex property ownership issues.
Our work in RA v KS is one example of the technical property and financial remedy issues that can arise when one party seeks the sale of a property before the final settlement.
If you are considering whether to pursue or defend an application for an interim order for sale, our family law solicitors can help you understand the options available, the risks involved and the practical steps to take.