How does a ‘charge’ work during divorce?

[Mumof3confused]

I am trying to get my head around this option. How does it work? Do you agree a set valuation and % at the time of divorce? I understand that it is a sum that should be paid at a certain trigger point but could you also choose to part-pay this, ie £10K per annum or something like that? Does the amount accrue interest over time?

It can be a set amount or a % interest. Depends on the situation. Once the reason for deferment ends you pay it out.

You agree a % split and time frame for the sale (the trigger point). A sale price isn’t agreed at that point, the price is at the point of sale.

The property is then transferred into your name and a ‘charge’ on the property title is added as there a charge (in this case a ownership %).

You live in the house, pay the mortgage & outgoings.

When the trigger point is reached the house is sold and you split the equity minus sake costs as agreed.

I haven’t heard of ‘part payment’ options.

If anyone is ever offered a fixed amount rather than a percentage against an asset, for goodness sake say no. To do so, you are effectively exposing yourself either to that asset rising in value (if you are the one waiting for your share) or you are exposing yourself to that asset falling in value (if you are the one who has to pay later).

Two scenarios. If the value of houses rises significantly, then the party waiting for their cash could end up priced out of the housing market when they get their share back. If the value of houses falls, then the person who has to pay may have absolutely nothing left after paying their ex-partner their share.

Percentages are far more normal for this reason.