transfer of equity

[saskiadiablo]

My partner and I are splitting up and I want to buy our jointly owned property from him (owned 50/50).  There seems to be two ways of agreeing on the sum to pay him off. 

1. Divide the profit made on the property in two and pay him his half

OR:

2. Pay him back his half of the profit, as well as his half of the original deposit and his mortgage contributions over the last 3 years.

What is the typical way of doing this?  Is this also the fair way?