Detailed Answer
When co-owners sell real property in Colorado, the process of dividing net sale proceeds often requires an accounting of mortgages, liens, and expenses paid for repairs or maintenance. You can ask a co-owner to produce mortgage statements and repair receipts, and Colorado law provides ways to enforce an accounting and to adjust each co-owner’s share based on contributions and obligations — but you generally cannot unilaterally withhold sale proceeds solely because the other co-owner resists producing documents.
What you should understand about rights and obligations
- Document requests are reasonable. Co-owners commonly ask each other for mortgage payoff statements, monthly mortgage statements showing payments, paid repair invoices, canceled checks, and other records that show who paid what for the property.
- Paying the mortgage vs. mortgage lien. If the mortgage on the property is a recorded lien, any outstanding mortgage balance must typically be paid at closing (or satisfied from sale proceeds) regardless of who made prior payments. If one co-owner personally paid mortgage payments, that person may have a claim for contribution or reimbursement from the other co-owner(s).
- Repairs and necessary expenses. Money spent for necessary repairs or to preserve property value is usually reimbursable in an accounting before distribution of proceeds. Money spent for voluntary improvements may be treated differently (sometimes increasing the seller’s share, sometimes treated as an improvement that affects equitable distribution).
- Accounting and equitable adjustments. Colorado courts can order an accounting between co-owners and adjust the division of proceeds to reflect payment of mortgages, taxes, insurance, repairs, and other expenses. If co-owners cannot agree, a partition action can ask the court to sell the property and determine credits and debits among owners.
Statutes and official resources
Colorado’s statutory framework governing property rights and procedures for actions involving real property is found in the Colorado Revised Statutes. For general reference to the statutes and to search for sections on partition, liens, and property obligations, see the Colorado Revised Statutes page: https://leg.colorado.gov/colorado-revised-statutes. For procedural information and forms related to civil actions and partition, see the Colorado Judicial Branch: https://www.courts.state.co.us/.
How courts typically handle disputes over documents and credits
- Demand and production. A written demand for documents is a common first step. If you later file a lawsuit (for partition, accounting, or contribution), you can use discovery tools and subpoenas to compel production.
- Escrow or court-ordered holdback. If sale is imminent and there is a dispute about credits, proceeds may be placed in escrow. The escrow agent or court can retain funds until the accounting is resolved or a court directs distribution.
- Court-ordered accounting. In a judicial partition or accounting action, the court can credit payments made by one co-owner (mortgage payments, repairs) against that co-owner’s share of the proceeds, subject to proof and equitable considerations.
- Equitable remedies. If one co-owner improperly withholds records or tries to hide payments, the other co-owner can seek discovery sanctions, a court-ordered accounting, and other equitable relief.
Practical examples (hypothetical)
Example 1 — Mortgage payments by Co-owner A: If Co-owner A paid the mortgage for two years while Co-owner B paid nothing, A can request documentation from B showing any payments B made. At sale, A may be entitled to reimbursement or credit for A’s payments, after the mortgage lien is paid from proceeds.
Example 2 — Repair receipts: If Co-owner B spent $10,000 on emergency roof repairs and has invoices and paid checks, B should provide those receipts. The court or the co-owners can treat that $10,000 as a reimbursable expense before splitting the remaining proceeds.
What you can do now — step-by-step
- Send a written demand. Ask for mortgage payoff statements, monthly mortgage statements for the relevant period, paid invoices/receipts, cancelled checks or bank transfers, and any contracts related to repairs. Set a reasonable deadline (for example, 10–14 days).
- Preserve evidence. Keep copies of your own payments, communications, and receipts. Save emails, texts, and any estimates or contracts.
- Offer mediation. A neutral mediator can often resolve disputes faster and cheaper than court.
- If necessary, file a partition or accounting action. If negotiations fail, Colorado courts can order sale and do the accounting. In litigation, you can subpoena documents and ask the court to hold sale proceeds in escrow pending resolution.
What documents to request
- Mortgage statements and payoff statements showing outstanding principal and payments
- Bank statements, canceled checks, wire confirmations for mortgage and repair payments
- Paid invoices and receipts from contractors, suppliers, or service providers
- Title and closing statements, tax bills, HOA statements, and insurance premiums
- Any written agreements among co-owners about payment responsibilities
Limitations, risks, and timing
- You cannot typically keep a buyer from closing or permanently tie up proceeds without a court order. If funds are disputed, ask the title company to hold proceeds in escrow or seek a court injunction.
- Delay increases risk. If you wait too long to assert a claim for reimbursement, statutes of limitation and evidentiary difficulties may weaken your claim. Consult an attorney promptly if large sums are at stake.
- Proof matters. The person claiming reimbursement must provide clear documentation showing the payments were made and were appropriate (e.g., necessary repairs vs. cosmetic upgrades).
Helpful Hints
- Make a clear written demand for documents and keep a copy.
- Ask the title/closing agent to hold proceeds in escrow if there’s an unresolved dispute.
- Gather your own proof: bank records, canceled checks, emails, contractor invoices, and photos showing the work.
- Distinguish between mortgage payoff (a lien obligation that must be satisfied at closing) and reimbursement claims for payments made outside of closing.
- Propose mediation or arbitration if co-owners prefer avoiding court.
- If you plan to litigate, preserve electronic evidence and communications; do not delete texts or emails about payments or repairs.
- Talk to a Colorado real estate litigation attorney if the amounts are large or if a co-owner refuses to cooperate; an attorney can issue subpoenas and file for a judicial accounting or partition action.
Quick resource links (general): Colorado Revised Statutes: https://leg.colorado.gov/colorado-revised-statutes. Colorado Judicial Branch (court forms and procedures): https://www.courts.state.co.us/.
Disclaimer: This article explains common Colorado law principles and practical steps but is not legal advice. It does not create an attorney-client relationship. For advice specific to your situation, consult a licensed Colorado attorney who handles real property and co-ownership disputes.