Disclaimer: This article is for educational purposes only and does not constitute legal advice. Consult a qualified attorney to discuss your specific situation.
Detailed Answer
When two or more people own real property as co-owners (tenants in common or joint tenants) under Arkansas law, each owner generally bears responsibility for expenses related to the property in proportion to their ownership interest. If one co-owner makes improvements to the estate real property—such as adding a new roof, renovating living space, or installing new fixtures—they may have the right to seek reimbursement from the other co-owners.
1. Demand for Contribution Under Ark. Code § 18-49-101 et seq.
Arkansas Code § 18-49-101 provides that when co-owners make outlays for the preservation or improvement of real property, each co-owner must contribute according to their share of ownership. If one co-owner pays more than their fair share, they can demand contribution from the others:
- Send a written demand outlining the nature of the improvements, dates, total cost, and each co-owner’s proportional share.
- Allow reasonable time for the other co-owners to pay their share.
Link: Ark. Code § 18-49-101
2. Filing a Partition Action with Accounting for Improvements
If co-owners cannot agree voluntarily, one owner may initiate a partition action in chancery court under Ark. Code § 18-12-507. In a partition:
- The court may order partition in kind (dividing the land) or by sale.
- Commissioners appointed by the court will assess the value added by improvements and adjust each co-owner’s share of the proceeds accordingly.
- The improving co-owner can recover the fair market value of the enhancement before proceeds are distributed.
3. Asserting an Equitable Lien
In some cases, the improving co-owner may ask the court to recognize an equitable lien (a charge on the property) to secure reimbursement. To do so, the co-owner must:
- File a notice of equitable lien (also called a “notice of improvement lien”) in the county land records.
- Show the improvement was made with the consent (express or implied) of the other co-owners or for the benefit of the entire estate.
4. Proving Value and Benefit
Whether seeking contribution, partition accounting, or an equitable lien, the improving co-owner must document:
- Detailed invoices and receipts for labor and materials.
- Expert appraisals or before-and-after valuations showing increased property value.
- Communications confirming co-owner approval, if any.
Helpful Hints
- Keep all contracts, receipts, and communications related to the improvements in one organized file.
- Attempt informal negotiation and mediation before resorting to court.
- Consult with a real estate attorney early to understand deadlines and procedural requirements.
- Verify ownership shares in the deed to calculate each party’s proportional liability.
- Be aware of any statutory deadlines for filing partition actions—delays may waive certain rights.