Disclaimer: I am not a lawyer and this is not legal advice. This article explains general information about Arkansas law so you can decide whether to consult an attorney.

How co-ownership, mortgage payoffs, and repair costs are treated in Arkansas

When co-owners sell real property, the sale process and distribution of proceeds usually must address three separate categories of money: the mortgage or lien payoffs (what the lender is owed), items that reduce the sale proceeds (closing costs, liens, taxes), and claims one co-owner may have against the other for contributions (mortgage payments, repairs, taxes, or improvements). Under Arkansas law and general equitable principles, mortgage liens and other recorded encumbrances get paid from sale proceeds first. After liens and closing expenses, remaining proceeds are split according to the owners’ interests, subject to any court-ordered adjustments for contributions or reimbursements.

You can ask a co-owner to provide mortgage statements and repair receipts. But whether you can legally force them to produce documents before the proceeds are split depends on how you and the co-owner proceed:

• If you both agree on sale and distribution, you can condition that agreement on production of documentation and an agreed accounting.
• If one co-owner refuses to cooperate, you can ask a court for relief. In a partition-by-sale or partition-for-division action, the court can order an accounting, allocate credits, and direct how proceeds are distributed.
• If the property is sold to a third-party buyer before you secure a court order, the lender(s) will typically get payoff from the closing agent, and the title company will require clear title. That can limit your ability to unilaterally hold proceeds without a court order or an agreement among owners.

What documentation matters and why

Useful documents include:

• Mortgage payoff statements or payoff demand letters from the lender or loan servicer (not simply a co-owner’s word about payoff amounts).
• Receipts, canceled checks, bank records, contractor invoices, written change orders, or credit card statements for repair work or improvements.
• Proof of payments one co-owner made for property taxes, insurance, utilities, or other shared obligations.

Mortgage payoffs determine how much the lender must be paid from sale proceeds. Receipts and invoices support a co-owner’s claim for reimbursement or credit against the sale proceeds. Without documentation, a co-owner’s claim for reimbursement is weaker. Courts and title companies rely on verifiable documents.

Can you withhold proceeds until you get those documents?

Short answer: You can try, but you may need a court order to do it safely.

Details:

• If the co-owners agree, they can instruct the closing agent to place proceeds into escrow pending an agreed accounting or to give credits to the party who paid mortgage or repair bills.
• If one co-owner refuses, you can file a partition action asking the court to order an accounting and to keep proceeds in the registry of the court until claims resolve. In a partition action, Arkansas courts can adjust the distribution of proceeds to reflect equitable contributions.
• Absent agreement or a court order, you risk liability if you withhold funds that the other co-owner believes they are entitled to. Buyers and lenders also insist on clear title and may require release of funds to satisfy encumbrances.

How a court typically evaluates claims for mortgage payments or repairs

Courts look at who benefitted, who paid, and whether the work was ordinary maintenance or a capital improvement. Typical rules courts use:

• Payments that kept the mortgage current or preserved the property often produce a right to contribution from the other co-owner, provided the paying co-owner can document the payments.
• Costs for capital improvements that increased the property’s value may be reimbursable or credited at sale, but the paying co-owner must show reasonable proof (contracts, invoices, before/after photos, permits, or contractor affidavits).
• Routine maintenance paid by one co-owner sometimes is treated as part of ownership expenses and may not result in a full dollar-for-dollar reimbursement unless the owners agreed otherwise.

Example (hypothetical)

Two co-owners own a house 50/50. Owner A paid $6,000 over the last year for repairs and made $4,000 in mortgage payments that kept the loan current. Owner A asks Owner B for receipts and the mortgage payoff statement before sale. Owner B refuses. Owner A files a partition action asking the court to order an accounting, to credit Owner A for documented payments, and to place sale proceeds in the court registry until allocation. The court can require Owner A to produce proof. If Owner A fails to prove amounts, the court can deny some or all of the claimed credit. If Owner A proves the payments, the court can adjust the split to reimburse Owner A before final distribution.

Practical steps you can take in Arkansas

1. Ask in writing for the mortgage payoff statement and repair receipts. Put a deadline on the request and keep copies.
2. Contact the mortgage lender or servicer yourself to obtain a formal payoff demand. Lenders will provide payoff figures to owners or authorized agents.
3. Collect and preserve any receipts, canceled checks, invoices, permits, and photos that show repairs or improvements.
4. Consider asking the title company or closing attorney to escrow the disputed portion of proceeds pending an accounting or written agreement among owners.
5. If the co-owner still refuses, consult an Arkansas attorney about filing a partition action asking the court to order an accounting and to hold proceeds in the court registry until the dispute resolves.
6. Consider mediation to reach a settlement before going to court. Courts in Arkansas frequently encourage settlement, and mediation is less costly and faster than litigation.

Where to look for Arkansas law and court procedure

For general statutes and local rules, start at the Arkansas General Assembly website: https://www.arkleg.state.ar.us/. For information about Arkansas courts and filing procedures, see the Arkansas Judiciary: https://www.arcourts.gov/. If you file a partition action or seek an accounting, a local circuit court handles the case.

Helpful Hints

• Document everything. Emails, text messages, invoices, canceled checks, and photos help prove payments or improvements.
• Get payoff figures directly from the lender. A lender’s payoff demand is stronger evidence than a co-owner’s statement.
• Use escrow. If possible, have the closing agent place disputed funds into escrow or the court registry until the dispute resolves.
• Act quickly. Delays can make it harder to reconstruct records or to obtain a court order before a sale closes.
• Think about value, not just dollars. Courts consider whether repairs increased market value, not only the invoice amount.
• Consider mediation. It often saves money and time compared with litigation.
• Talk to a local attorney. An Arkansas attorney who handles real estate or partition cases can advise you about filing for an accounting, seeking injunctive relief, or protecting proceeds.